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IPFS News Link • Economy - Economics USA

"Garbage Deals": Dealership Puts Customers In Cars With $3,000 Monthly Payments

•, by Tyler Durden

As a refresher, the data from Tuesday by the Federal Reserve Bank of New York showed (read: ZH report here) the rate at which car owners are behind on their payments hit an annualized rate of 7.7%, the highest level since 2010. 

"Delinquency transition rates have pushed past pre-pandemic levels, and the worsening appears to be broad-based," researchers at the NY Fed wrote in a blog post. 

Given that we already covered this in a report titled Credit-Card & Auto Delinquencies Soar, Especially Age Group 18-39as well as other eye-opener credit reports in recent weeks:

Banks Report Tighter Standards, Weaker Loan Demand But Some Improvement As Financial Conditions Ease

Stunning Collapse In Credit Card Debt Change As Average APR Hits New All-Time High

... perhaps there is reason to believe an increasing number of households have hit the proverbial brick wall despite the Biden administration cheering 'Bidenomics' on legacy corporate media outlets. 

The households who piled on insurmountable auto and credit card debt through the Covid era and the current high-interest rate environment are likely the folks running into financial turmoil. 

An Edmunds report from last year showed the percentage of drivers with plus $1,000 monthly payments jumped to an all-time high of 17.1% in the second quarter of 2023 compared to 16.8% in the first quarter. The reason is that the average amount financed for a new vehicle is around $40,000, plus auto loan rates are at a generational high.