Analysts predict auto loan delinquencies will keep rising into 2024. David Zalubowski/AP
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.
A record number of subprime borrowers are behind on their auto loan payments by 60 days or more, according to figures from Fitch Ratings reported by Bloomberg.
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.
Analysts predict that auto loan delinquencies will continue to rise into 2024 and peak at about 10% before they start to fall, per CNN.
In the second quarter of this financial year, credit card debt surpassed $1 trillion for the first time in the NY Fed survey's history.
More than a third of Americans are considered subprime borrowers, according to an Experian study, meaning they have lower credit scores and are deemed less likely to meet their repayments on loans. As a result they usually have to pay considerably higher interest rates.
Cox Automotive, a leading auto organization, predicts that 1.5 million cars will be repossessed this year – 300,000 more than in 2022.