Auto loans past due overview:
- Who: Capital marketing company Fitch Ratings released data revealing a record amount of American subprime borrowers are behind on their auto loan payments by more than 60 days.
- Why: The record number of delinquencies is happening amid a period of high inflation, a tough job market, and the end of a moratorium on student loan repayment.
- Where: American subprime borrowers around the country are delinquent on their auto loan payments.
A record amount of American subprime borrowers are behind on their auto loan payments by more than 60 days, with the rate reaching a nearly-30-year high of 6.11% last month, according to data released by capital marketing company Fitch Ratings.
The number also represents an increase from the 5.93% of American subprime borrowers who were recorded to be behind on their auto loan payments by more than 60 days at the beginning of the year, reports Business Insider.
Analysts, meanwhile, predicted earlier this year that the rate of delinquent loans will continue to increase into next year, eventually topping out at around 10% before falling back down, reports CNN.
In addition to delinquent subprime loans, the rate for vehicle repossessions is also increasing, leaving more and more Americans without a means of transportation, reports Business Insider.
American subprime borrowers asked to pay substantially higher interest rates on auto loans than prime borrowers
The increased rate of delinquencies comest amidst a period of high inflation, bumpy job market and the end of the moratorium on student loan repayment.
High interest rates are also reportedly impacting American subprime borrowers, with credit card debt exceeding $1 trillion for the first time in the history of a survey conducted by the New York Fed, as more Americans turn to borrowing to cope, reports Business Insider.
More than a third of American consumers are considered subprime borrowers, according to a Experian study — meaning they have lower credit scores and are seen as less reliable to meet loan repayments.
Subprime borrowers are commonly required to pay substantially higher interest rates, with rates for a new car averaging 11.5% and rates for used cars averaging 18.5%, reports Business Insider.
Prime borrowers, meanwhile, are reportedly charged far less — an average of 6.4% for a new car and 8.75% for a used car.
In other news involving loans, the Consumer Financial Protection Bureau ordered Wells Fargo to pay $3.7 billion in compensation and penalties last year following claims the bank unlawfully charged fees and interest on auto loans, mortgage loans and consumer accounts.
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10 thoughts onAmericans past due on auto loans at highest rate in almost 30 years
After making timely payments on my car loan to Wells Fargo for 5 years with 10% interest rate , I was several injured leaving me with a long term recovery and loss of wages . Continued to make over $600 payments and rent , etc . It was draining me and in fear of losing my vehicle asked Wells Fargo for a work out plan . After speaking to many different representatives and inaccurate information. I was behind in my pay payments. Wells Fargo repossessed my vehicle that I worked so hard for with only 1 year to pay off. This has left me depressed and helpless. Working on getting it back and owing more with all the fees . 🙏
I deal with Ally bank, the worst. The people who answer the phones have no respect for us the customers. The interest I’m paying is ridiculous. On two occasions I called them because I was sick with Covid to set up a deferred payment and the refused to help or said ok and needed me to pay $900 in advance. This bank needs to be investigated. Add me.
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I’m paying over 29 APR as well how can we normalize these APR it’s hard to keep up when they give you all the rope to hang yourself
I had just finally paid off my car and was so excited not to have a car payment, but then things started happening mechanic wise and I couldn’t afford to fix it so I figured I would go buy a new car but my interest rate was extremely high, but I had no choice with the interest rate being so high and making my monthly payments more than I could afford as everything else is going extremely up in percentage. The job market has not increased wages since Covid making it very impossible for a single mom to live a somewhat comfortable life with rent food car payment insurance it’s like the governor wants everybody to actually , not succeed in life, but actually Barry himself in debt that causes everybody to be depressed, worried anxiety
Had my car repossesed last week for the first time because I got sick lost my job and someone did not follow a court order. Affinity credit denied any forbearance on my loan and 3 days after rwposession asked me to donate money to them. The state I like in offers no reliable transportation for individuals who receive ssdi and there is no public transportation u less I have at least 30.00 to pay a uber to get me to a train station. This state says transportation is not a necessary when I asked for help. But my last treatment for my medical need is in December and they can’t even help me get there because it’s not within the 37 doctors available in this area.
I am paying 35%. I lost my job due to cancer and need my car for my care and am fighting to keep it. I am scared.
My husband fell and is fighting to get his temporary disability or something he has not been paid since July..he is at risk of losing his car because he has pushed back his loan Wells Fargo said they will not push it any more. I’m on total disability and it’s killing me trying to find money for his car loan.
We pay 24%
I’m struggling to pay my auto loan which I’m paying over 29%