Fox Business’ Effef Flock reports the latest news from the automotive industry, as data reveals that insurance prices have risen by one year over a year.
Missed payments on automatic loans from American car owners Rose to the highest level for three decades earlier this year.
The percentage of borrows with car loans that have been at least 60 days due to their loans increased to 6.56% in January, which was the highest level since the data collection began in 1994, according to Fitch.
The share of 60 days past from the debt relationship Automatic Loan borrows It remained over 6% since August 2024, after first stopping the 6% threshold at the beginning of last year. Earlier it approached the mark of 6% in 1996, 2019 and 2023.
The increase in the number of borrows fighting automatic loans comes after consumers continue to fight the impact of inflationary pressures that the US economy has experienced in recent years, which have tightened the budgets of Americans. Higher interest rates aimed at reducing inflation have also made new automatic loans more expensive for borrows.
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Automatic loan loan delinquents climbed to a record level in January, Fitch Ratings reported. (Brandon Bell / Getty Pictures / Getty Pictures)
Recent analysis of Federal Reserve The Yorkyor Bank has revealed that a car loan balance has grown steadily since 2011 and increased by $ 48 billion in 2024 as a result of an influx of new origin automatic loans.
“Almost all borrower groups have noticed that the delinquency rates are rising above their pre-pandemic levels,” Nyujor Fed wrote. He noted that borrows with credit rates between 620 and 679 saw their probability of becoming delinquent in a quarter of about 2% before the 4% pandemic in 2024.
The report states that consumers are “in pretty good shape in terms of household debt landscape” with stable balances and solid mortgage loans – but observed problems with automatic loans.
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High car prices and raised interest rates tightened borrows with automatic loans. (Bridget Bennett / Bloomberg through Getty Images / Getty Images)
“However, for automatic loans, higher car prices combined with higher interest rates have prompted monthly payments and put pressure on consumers during the income and spectrum of credit results,” Fedujork Fed explained.
“The episode of rapidly rising car prices has heterogeneous impacts on borrows, which have shifted between used and new cars, as well as between loans and lease. These shifts have put extra pressure on lower income and Borrows with lower credit score Who may have had to opt for used cars with higher prices in recent years, “economists wrote.
“The used car prices have since dropped from the top, potentially leaving some debtors under water on those vehicles and creating potential challenges for repayment,” they noted.
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The Yorkyork Fed In February, it announced that among all borrows of automatic loans, the share of borrows that entered serious delinquency with payments at least 90 days in the past, increased to 3% in the fourth quarter of 2024, which was the highest level since 2010.
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