Car repossessions and loan defaults are on the rise, nearing pre-pandemic levels, reports NBC News. Car prices are soaring, and inflation continues to rise. NBC News views it as a warning sign for the economy.
“The lowest-income consumers, the rate of loan defaults is now exceeding where it was in 2019, according to data from ratings agency Fitch.”
“Industry analysts worry the trend is only going to continue into 2023 with economists expecting unemployment to rise, inflation to remain relatively high, and household savings set to dwindle. At the same time, a growing number of consumers are having to stretch their budgets to afford a vehicle; the average monthly payment for a new car is up 26% since 2019 to $718 a month, and nearly one in six new car buyers is spending more than $1,000 a month on vehicles. Other costs associated with owning a car have also shot up, including insurance, gas, and repairs.”
The people suffering are the ones who could afford car payments a couple years ago. There are so many repossessions that repo men can barely keep up.
This is another bad sign for the economy.
“Right now, it’s really the perfect storm,” said Cross. “Over the last two years, vehicle prices were inflated because there was no new car supply, people were still buying like crazy because they had a lot of stay-at-home cash, they had inflated credit scores, so it was like a recipe for disaster.”
The Consumer Financial Bureau is concerned. They gave loans to people with low scores. This has happened before.
We have another bubble.
Cox Automotive thinks that despite this, long-term through 2025, overall defaults and repossessions will remain at or below historic norms. That’s very optimistic, given the situation and the fact that policies are getting worse.
Great job, Joe!
These two know he’s not even running the government. It’s unclear if he knows what is even going on.
We’re bein snookered and mocked.