Posted on 09/15/2025 9:12:47 AM PDT by algore
Many Americans love the feeling of driving a new car, but the price of that thrill is pushing household budgets to the edge. Auto loan delinquencies are spiraling, the nation now owes a staggering $1.66 trillion in auto loans, and some figures show scary similarities to the period right before the 2008 financial crash.
That’s according to a new report titled “Driven to Default: The Economy-Wide Risks of Rising Auto Loan Delinquencies” from the Consumer Federation of America (CFA). It describes auto finance in the US as being “at breaking point,” and criticizes Congress and the country’s federal watchdogs for stepping back, despite evidence showing they’re needed more than ever to protect buyers from unscrupulous dealers.
One of the reasons owners are struggling to keep their heads above water is the high cost of monthly car payments, caused in part by high interest rates. Figures show the typical monthly payment is $745 and 20 percent of buyers are saddled with monthly bills of at least $1,000. Things could get worse quickly because the $7,500 EV tax credit is due to disappear imminently.
And this time it’s not just subprime borrowers who are feeling the heat. Car buyers with above-average credit scores are twice as likely to fall behind on payments as they were before the pandemic. Younger buyers are hitting the payment skids in high numbers and the repossession rate across all age groups jumped by 43 percent between 2022 and 2024, according to Cox data.
Moreover, the CFA warns that we should be concerned about more than a few cars getting repossessed because people haven’t kept up with payments. It says Americans have a tendency to prioritize their car bills over other household and living expenses, meaning the delinquency rates could be pointing to much more widespread and significant problems across the US economy.
“Now is the time for policymakers to take a hard look at the auto lending market to call out exploitative practices that raise prices and require our federal regulators to stop sleepwalking their way through this crisis while Americans suffer,” the organization suggests.
What year?
Ford does not get stuck holding the bag when the car borrowers default on their payments.
Apparently that is all Ford cares about....
Even $750 is insane. If you think you can afford a $50,000 car you better have an income where you can buy it for cash.
We’ve always bought high mileage 2-4 year-old cars and never gone wrong. We’ve also bought less than we can afford because cars aren’t worth wasting money on.
Our latest one we paid cash for. We did take out a small loan on my wife’s car because we were earning far more on the money than we paid in interest. I think it was a two-year loan at $250 or so a month.
It’s great to live below your means
1964
In 2019 we bought a year old Jeep wrangler.....the monthly payment terms ended up being right at $300 and my wife screamed about it for months. Lol!
People would kill for a payment like that nowadays 😏
Influx of inventory in the used car market, and loan default, can be an early predictor of recession/crash coming.
Be careful when buying used now. Many undocumented visitors are making money moving rebuilt, salvage, flood cars.
You bet...Reading what some of these people are paying for a stinking car loans are really over the top!
The only way we could ever afford anything like a home, was to keep our old cars running and well maintained. New cars or even car payments for used cars would have never have allowed that.
$800 a month for a car payment? That’s like another mortgage payment! lol...Insane!
The car that looks the same coming and going.
Used car prices spiked another 6%
…….and weed.
Our cars are over ten years old and long ago paid off.
They work fine and we will keep them that way
Same here. I see no need to buy a vehicle that drops a large percentage of its value when driven off a lot. We buy decent used cars, maintain them with regular oil changes, etc., and drive them until we think they are no longer reliable transportation.
I’m still driving my 2003 vehicle that I purchased in 2016 for $6400. My mechanic says “don’t sell it, you’d regret it”.
I can’t imagine having a 5 to 7 year car note with a monthly payment of 700+.
Yeah, and the new cars have turbos that need the oil regularly replaced. They are not going to be near as dependable.
Our streets are going to look like Cuba.
With insurance that is 30 bucks a day. Might as well rent/lease a car. Even use uber depending. it you add in the depreciation of 400 bucks per month it’s approaching 40 to 50 bucks per day.
Every time I think about selling my truck for a newer car, I remember several things. It’s an ‘05, F350, V8 turbo-diesel, Harley edition that runs like new, looks like new, rides like new. It gets 18.3 mpg at highway speeds. But the most important thing is:
I paid cash 5 years ago to buy it and there is no payment. It’s paid for.
I simply cannot imagine someone walking into a dealership and thinking, “Well, $1200 a month isn’t bad”..
The power glide was an option. Geez.
Add in depreciation and it boggles the mind.
We just turned in a twenty year old van. Poor thing was on its last miles. Our other vehicles are eleven years old, although the one purchased a month ago only has 60,100 miles on it. They gave me, as a woman, such a hassle about getting a loan when I tried to buy it that I used my savings to pay cash. I don’t like borrowing anyway.
I wonder how many of these “Americans” are in the country illegally.
That new fully loaded Tahoe, financed over 84 months is still over $1,200 per month.
Insurance over $1800/yr.
A set of tires $900.
I see them all over town. Half the Raley’s perking lot is that or a giant ford truck.
I think, as things slow down, at least half of those are going back and will wind up on the used market.
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