The share of new auto loans with monthly payments exceeding $1,000 has hit a new record as borrowing costs continue to rise and new car prices remain elevated. Consumers are taking on too much auto debt, which could have disastrous consequences during the next economic downturn.
Edmunds’ second-quarter vehicle transaction data shows that 17.1% of consumers who financed a new car signed on for four-figure monthly payments. This now stands at a record high, up from 12.2% a year earlier. Before Covid, the figure was around 4.3%.
“The double whammy of relentlessly high vehicle pricing and daunting borrowing costs is presenting significant challenges for shoppers in today’s car market,” Ivan Drury, Edmunds’ director of insights, told Detroit Free Press.
Drury continued, “The Federal Reserve’s recent pause in interest rate hikes, unfortunately, didn’t offer much relief for consumers, and hints at further raise later this year mean auto loan rates could even continue to increase.”
Continue reading ““People Swimming In Debt”: Record Number Of Car Buyers With $1,000 Payments”
