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More people are missing car payments in another ominous sign for the economy

The article below is sourced from Insider News. The views and opinions expressed in this story are those of the Insider News.

  • A record number of subprime borrowers are behind on auto loan payments by more than 60 days.
  • The rate hit 6.11% in September, per figures from Fitch Ratings reported by Bloomberg.
  • Vehicle repossession rates are also on the rise, leaving many without transportation.

The rate hit 6.11% in September – the highest since records began in 1994, and was up from the 5.93% recorded at the start of the year.

Margaret Rowe, senior director at Fitch, told Bloomberg: “The subprime borrower is getting squeezed. They can often be a first line of where we start to see the negative effects of macroeconomic headwinds.”

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Cox Automotive, a leading auto organization, predicts that 1.5 million cars will be repossessed this year – 300,000 more than in 2022.

The rising number of delinquencies on auto loans is not putting off some consumers, however. A record number of new car buyers took out loans with monthly payments of $1,000 or more in the three months to June, according to data from Edmunds.

Car payments have become the highest expense for some Gen Zers and millennials, even exceeding their rent.

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