• US drivers are late on their car loan payments at the highest rates on record.
• A report by Bloomberg suggests that this trend might continue in the future.
• 6.11% of subprime auto borrowers were at least 60 days past due on their loans.
• This is the highest rate since data was first collected in 1994.
• The average interest rates on subprime loans are between 11.75% and 18.5%.
• Americans are spending between $500 and $700 a month on car payments, excluding insurance.
• This is a significant financial stressor for many Americans who rely on cars for transportation.
• Now might not be the best time to buy a car, as dealerships are competing for business in early April to early May.
• Earlier this year during tax season might have been a better time to buy a car.
US drivers are experiencing difficulty repaying their car loans on time, with record rates of late payments reported by Bloomberg. This trend of late payments for auto loans is expected to persist into the foreseeable future. Experian reported that in September 6.11% of subprime auto borrowers were more than 60 days late with their loans – the highest rate ever seen since records started being collected in 1994. Subprime loans typically carry interest rates ranging from 11.75% for new cars up to 18.5% on used ones, according to Experian’s estimates. Americans spend between $500 and $700 monthly on car payments (not including insurance premiums). This financial strain can be especially challenging for those relying on cars for commutes or other essential activities; particularly subprime borrowers who may find it challenging to meet payments due to higher interest rates and their respective monthly loan repayment obligations.
This situation raises grave doubts over the economy’s overall health and the financial wellbeing of Americans. Margaret Rowe from Fitch Ratings notes that subprime borrowers tend to feel first the negative impacts of macroeconomic headwinds – late car loan payments could be an indicator of deeper issues that threaten to undermine growth.
Timing is of the utmost importance if you’re shopping for a car. According to The Wall Street Journal, the optimal time is April and May because that’s when most people receive their tax refunds and dealerships compete with one another for business. With tax season still several months away though, it might be wise to hold off buying just yet.
Conclusion In conclusion, late car loan payments among US drivers signal potential financial and economic challenges. For individuals having trouble making car loan payments, seeking financial assistance and looking for ways to manage expenses is critical. It is also crucial that we closely track this trend to gauge its impact on our overall economy and American consumers alike.