Americans are behind on car payments at a record level

[Street Knowledge]

April Rubin

Americans are missing their car payments at the highest rate in decades, according to Fitch Ratings data.
Why it matters: Car costs, including loans and insurance, have soared in an economy where consumers are showing mounting signs of stress.

By the numbers: 6.6% of of subprime auto borrowers were at least 60 days past due on their loans as of January 2025.

• This is the highest level since the agency began collecting data. The fall and winter of 2024 saw the next highest subprime delinquency rates.
• Prime borrower scores are faring better than subprime, with 0.39% 60-day delinquencies in January 2025, up from 0.35% in January 2024.

Threat level: "Subprime auto loans face a deteriorating outlook for 2025," a Fitch report said.

Driving the news: Multiple factors have increased the cost of car ownership, per Cox Automotive executive analyst Erin Keating, Axios' Joann Muller reports.

• Vehicle prices are higher, averaging just under $50,000, and high loan rates (over 9% for new cars and almost 14% on used cars) are translating to steep monthly payments.
• Plus, car insurance rates are up 19% year over year, while repair and maintenance costs have risen 33% since 2020.

State of play: Other metrics, like consumer confidence and credit card delinquencies, are showing warning signs, too.

• The number of credit card holders only making minimum payments rose to a 12-year high, per the Philadelphia Federal Reserve.
• In the third quarter of 2024, the number of 30-day delinquencies rose to 3.52%, which marked double the rate from the pandemic low in 2021.

Zoom in: Delinquencies typically increase in January and February after the holidays, Mike Girard, Fitch's senior director for asset-backed securities in North America told Bloomberg.

• Low-income borrowers, though, will continue to be affected this year because of inflation and interest rates, he said.

https://www.axios.com/2025/03/07/car-loan-payment-delinquencies-record-high

 

[Canada Goose]

Too bad public transportation sucks in most of the U.S, so having a car is the only way to get around

 

[Street Knowledge]

Too bad public transportation sucks in most of the U.S, so having a car is the only way to get around

It sucks even in nyc which is known for public transportation

 

[Worthless Loser]

Maybe people shouldn't buy cars that cost 70,000 when they make 40,000 a year.

 

[Shadow King]

Maybe people shouldn't buy cars that cost 70,000 when they make 40,000 a year.

Thought I could beat y'all.

Nope.

 

[Ozymandeas]

I brought a Kia Forte. Gets me from A to B. I wish I would spend $60K on a car.

 

[Turtle]

I know someone paying $800 for a truck and like $600 for insurance.

His money is basically straight rent, car shyt, and junk food.

 

[Tribal Outkast]

Don’t spend more than you can afford on a car

 

[ReturnOfJudah]

2023 veh already paid off . Bought it off the lot with 9 miles too

 

[lowkey0z]

my bytch is paid off, whippin' this bytch till the wheels fall off

 

[ba'al]

You can buy a cheap hooptie but still need to pay for maintenance or invest time and energy into fixing it yourself.

Also I don't think most Americans are intentionally buying these cars at higher prices a lot of times the Dealership Mark up the car more than its worth with a bunch of fees. Even if you negotiate and haggle you still can end up getting yo pockets ran

I think there's a middle ground here.

 

[Majestyx]

paid my car off last year. that jawn better work for another 5

 

[Field Marshall Bradley]

Maybe people shouldn't buy cars that cost 70,000 when they make 40,000 a year.

Pull up stats where this is the case? And the opposite applies… as a business, you don’t loan money to people who can’t pay unless your loan will get subsidized by tax payers money at the end of the day….

 

[Trojan 24]

You can buy a cheap hooptie but still need to pay for maintenance or invest time and energy into fixing it yourself.

Also I don't think most Americans are intentionally buying these cars at higher prices a lot of times the Dealership Market up the car more than its worth with a bunch of fees. Even if you negotiate and haggle you still can end up getting yo pockets ran

I think there's a middle ground here.

Of course people shouldn't extend themselves, but the economy car is disappearing. Damn near every new car at a dealership is 40K+ now. Those stimmy dollars had people acting reckless and made car companies even greedier. Gonna be a lot of pain on both sides now

 

[Trojan 24]

I know someone paying $800 for a truck and like $600 for insurance.

His money is basically straight rent, car shyt, and junk food.

Unfortunately that's probably a higher percentage of the population then we realize, but everything look good on Instagram. I'm just glad I grew up in the era where it was understood you were gonna be broke as a college student/youngin unless your family had money