Subprime Auto Loans Are Turning Car Ownership Into a Trap

By LAURA BLISS: For More Info, Go Here…

A trio of new reports paint an increasingly troubling picture of the auto loan landscape. First up: According to new numbers from the Federal Reserve Bank of New York, a record 7 million Americans are at least three months behind on their car loan payments. That’s about a million more than there were in 2009, the end of the last recession.

(To understand the geography of this issue, see CityLab’s story about mapping auto debt from 2018.)

But a growing number of borrowers defaulting on their car loans is a signal of serious financial duress for those households, experts say: Because cars are so essential, Americans traditionally prioritize paying off these loans ahead of others.

Too few people are sharing the benefits of an ostensibly healthy economy in which unemployment is low and markets are strong. Wages are stagnant, living costs are rising, and many Americans are digging their way out of still other forms of debt, such as student loans.

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