Americans have missed car payments at the highest rate for over 30 years, data shows.
According to Fitch review6.56% of subprime car borrowers have been in the past at least 60 days on their January loans, the most since government agencies began collecting data in 1994.
The findings highlight the financial burden that many Americans feel is acute as rising costs and high interest rates make it difficult to keep up with their bills.
a Recent Reports The Federal Reserve Bank of New York has found that more borrowers are behind in paying their cars. In the fourth quarter of 2024, the percentage of car loans for all borrowers that have transitioned to past severe delinquency for more than 90 days rose to 3%, the highest level since 2010.
“Combining higher interest rates combined with higher interest rates increases monthly payments, putting pressure on consumers across the spectrum of income and credit scores,” says New York Fed researcher I wrote it.
The cost of buying a new car has increased by more than $10,000 since the pandemic. Approximately $38,000 January 2020 Over $48,500 According to Cox Automotive data, January 2025.
Rising interest rates have added to the pain and have been pushing the costs of funding up in recent years.
The average monthly payment for a new car loan was $755 in January. It fell from its $795 peak in December 2022, but well above the 2019 average of $566. Cox Automotive.
President Trump's tariffs could increase the price of the car another $12,000. According to one analysis.
That concern was so widely held that Trump granted a month's exemption, especially for his new tariffs, for automobile imports from Mexico and Canada.
Mexico and Canada are the top US trading partners for both automobiles and parts. In other words, Trump's 25% tariff could hurt consumers and automakers alike.
According to Fitch, those with a high credit score, who are so-called “prime” borrowers, are a little better when it comes to paying for their cars. In January, 0.39% of major borrowers had at least 60 days past their car loans from 0.35% a year ago.
According to BloombergFitch defines subprime car borrowers as those with credit scores of 640 or less.
