Over 7 Million Americans Are Over 90 Days Late On Their Car Loans

After the percentage of seriously delinquent auto loans reached its highest level since March 2012, the New York Fed is keeping a close eye on a recent uptick in auto loan originations to borrowers with subprime credit and an increase in delinquencies among younger buyers.

The central bank on Tuesday released its Household Debt and Credit Report for the fourth quarter of 2018. The subprime origination boost and delinquency rise are a couple of potential problem areas in the largely positive report that said auto loans were in "high gear" on average.

Overall, the 90-day delinquency rate represented 4.47 percent of the outstanding balance in the fourth quarter of 2018, up from 4.05 percent a year ago and the highest since 4.55 percent in the first quarter of 2012, the New York Fed said.

PUGPROUD - 2/14/2019 10:16:18 AM

+2 Boost

Why would you live within your means when others promise you everything will be free whether you are willing to work or not willing to work.

zlives - 2/14/2019 5:21:58 PM

+2 Boost

good point, deficit spending is an evil practice.

CANADIANCOMMENTS - 2/14/2019 12:28:29 PM

+2 Boost

Dealers selling a monthly payment instead of putting the focus on the future value of the loan and the stream of payments that underpins it. 60, 72, 84, 96 month terms as well are crazy. If you can't pay off your car loan in 24-36 months, don't buy it.

cidflekken - 2/14/2019 5:35:47 PM

+2 Boost

Valid points but, at least for the US, car loans were basically built off the 60-month model, much like mortgages are built off the 30-year model.

There are other factors that are contributing too. The cost of cars seems to be rising faster than the cost of goods. To find a truly affordable and practical car for a family seems nigh impossible.
Other household expenses are a strong factor and people tend to put priority on paying those bills before their cars. Cable TV or satellite can easily be over 200 per month. Having a cell phone is easily about 150 per month. Yes consumers can make less expensive choices but many don’t know better or refuse to know better.

MDarringer - 2/14/2019 7:53:54 PM

-1 Boost

84 months easy financing
96 months easy financing

Lovesponge76 - 2/14/2019 8:40:39 PM

+3 Boost

Reading some of these comments is comical...The reason cars are "over 90 Days Late On Their Car Loans" is the rich are getting richer and the guy/gal that cleans bathrooms and offices has to work several jobs to keep the lights on. Hey but those tax cuts really helped the middle-class...It is easy to sit on the hill and look down upon the flock and mock them for their silly behavior. Businesses

Some might say if you can't buy your house cash then you shouldn't ask someone to help you for 30 years. If you are responsible and care for your credit 60, 72, 84, 96 month terms are possible.

skytop - 2/17/2019 4:14:20 AM

+1 Boost

Looks like the 96 and 128 month loans will soon be rolling out.

MDarringer - 2/17/2019 9:20:11 AM

+1 Boost

Part of the problem is that cars have gotten more expensive and a some of it has to do with the mandatory safety standards increasing. While I am not against safety standards, not all are created equal, but we heap them on anyway. Then you figure in how every car must have a multiple entertainment screens as the trend and that adds more cost. Car simply used to be less expensive to build.

Then you factor in the Oprahfication of our thoughts were we tell ourselves "You deserve a BMW." when (1) you haven't earned one and (2) can't afford on, but that 72 or 84 month loan can make it a reality.

Then at 5 yers into the loan you decide to get the car you deserve now. No problem. Just get a new 84 month loan and roll over the debt from the previous car.