Car owners are having a hard time hanging onto their vehicles in the midst of an economy with soaring interest rates.
According to Cox Automotive, the volume of repossessed vehicles at Manheim auctions, the largest wholesale marketplace, is up 23% year over year through the first half of 2024. They are also up 14% compared with the same period in 2019, according to the data.
While that's only one metric, Cox Automotive senior analyst Jeremy Robb told FOX Business that he also tracks defaults industry-wide using Equifax data. That data suggests that defaults are up 11% during the first half of the year compared with the same period in 2019, Robb said. Lenders can repossess a vehicle when a loan is in default.
Data from the Federal Reserve Bank of New York’s latest quarterly tracking of American households’ levels of indebtedness, also revealed that 4.4% of Americans’ outstanding auto loan debt is in "serious delinquency."
FORD INVESTING $3B IN F-SERIES SUPER DUTY TRUCK EXPANSION TO MEET DEMAND
During the first fiscal quarter of 2024, auto loan balances also increased by $9 billion, and now stand at $1.62 trillion, according to the Fed.
Experts are putting part of the blame on the high interest rate environment.
During the first fiscal quarter of 2024, auto loan balances also increased by $9 billion. (Jonas Walzberg/picture alliance via Getty Images / Getty Images)
Today, the average new car loan interest rate is sitting at 7.9%, up from the 4.18% in July 2021, which is right before the Fed started raising interest rates, according to data from Bankrate. Meanwhile, the average used car loan rate is at 8.55%, up from the 4.80% in July 2021, according to Bankrate data.
Policymakers raised interest rates sharply in 2022 and 2023 to the highest level in more than two decades in a bid to slow the economy and cool inflation. Officials, now grappling with when they should take their foot off the brake, entered 2024 expecting to reduce rates at least three times this year, but have repeatedly pushed back their plans, even though inflation eased in both April and May.
www.foxbusiness.com
According to Cox Automotive, the volume of repossessed vehicles at Manheim auctions, the largest wholesale marketplace, is up 23% year over year through the first half of 2024. They are also up 14% compared with the same period in 2019, according to the data.
While that's only one metric, Cox Automotive senior analyst Jeremy Robb told FOX Business that he also tracks defaults industry-wide using Equifax data. That data suggests that defaults are up 11% during the first half of the year compared with the same period in 2019, Robb said. Lenders can repossess a vehicle when a loan is in default.
Data from the Federal Reserve Bank of New York’s latest quarterly tracking of American households’ levels of indebtedness, also revealed that 4.4% of Americans’ outstanding auto loan debt is in "serious delinquency."
FORD INVESTING $3B IN F-SERIES SUPER DUTY TRUCK EXPANSION TO MEET DEMAND
During the first fiscal quarter of 2024, auto loan balances also increased by $9 billion, and now stand at $1.62 trillion, according to the Fed.
Experts are putting part of the blame on the high interest rate environment.
During the first fiscal quarter of 2024, auto loan balances also increased by $9 billion. (Jonas Walzberg/picture alliance via Getty Images / Getty Images)
Today, the average new car loan interest rate is sitting at 7.9%, up from the 4.18% in July 2021, which is right before the Fed started raising interest rates, according to data from Bankrate. Meanwhile, the average used car loan rate is at 8.55%, up from the 4.80% in July 2021, according to Bankrate data.
Policymakers raised interest rates sharply in 2022 and 2023 to the highest level in more than two decades in a bid to slow the economy and cool inflation. Officials, now grappling with when they should take their foot off the brake, entered 2024 expecting to reduce rates at least three times this year, but have repeatedly pushed back their plans, even though inflation eased in both April and May.
Americans are falling behind on their car payments | Fox Business
Recent data from experts at Cox Automotive shows that Americans are still struggling with car payments. The number of defaults industrywide is up in the first half of 2024.
www.foxbusiness.com
Sobering...
