re: Americans Struggle to Afford Car Payments

quote:

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This is the highest delinquency rate of all time, even above the 6.0% peak in 1994 and 5.0% in 2008. The return of student loan payments has added pressure to many of these borrowers. Average student loan payments are at $500/month and the average new car payment is at $740/month.

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A couple of points...

-The repayments just started back.
-Remember, these are 60+ days past due. That means they stopped paying notes at least two months ago (student loan repayments just started back, so it hasn't yet had the opportunity to really impact car loans).
-These are just the sub-prime borrowers, they make up only 14%-15% of those holding car loans.

So yeah, this is bad news but it's missing a LOT of context. The other side of that is, when adding in more context, it looks even worse.

Consumer Credit Card Debt
Credit Card Interest Rates
Credit Card Delinquency Rates

Along with this, home foreclosures are still very low, but they have been rising somewhat steadily since late 2021.



With it becoming more and more likely we see a serious recession starting up by Q4-23/Q1-24 (and the Fed can't cut rates to ease the pressures), all of those numbers are bound to get worse.

I've said it before and I'll say it again, we are going to be lucky to get through this with just stagflation.