Young People Are Missing Auto Loan Payments At Near Record Numbers
A new report from the Federal Reserve Bank of New York shows that young Americans are late on paying their car loans at near record levels. In fact, loan delinquencies are at their highest rate since the Great Recession. Apparently, 4.6 percent of borrowers under 30 years old transitioned into serious auto loan delinquency — meaning they were over 90 days overdue on a payment — in the first quarter of 2023.
Gen Z and Millenials Are Having Trouble Making Car Payments On Time
That makes for the highest percentage of seriously delinquent payments since the end of the Great Recession all the way back in 2009… when I was in sixth grade. Back then, it was 4.7 percent, so we’re pretty close.
Don’t worry, though. Us young folks aren’t alone in this. The report says that across all ages, 2.3 percent of all auto loans were at least 90 days late. Auto loans overall are also down. The number of new auto loans and leases reportedly totalled $162 billion in the last quarter, and that’s down from last year.
According to Yahoo Finance, the reason Americans under 30 face a higher delinquency rate is because they are “more vulnerable” to the “ongoing macroeconomic trends.” Basically, the economy can fuck young people every which way, and there’s not much they can do about it. I know this first hand.
The article says that because young Americans have comparatively less savings than older people, they aren’t as prepared to absorb the additional costs that come with higher interest rates. Americans are reportedly paying between $50 and $60 per month more than a year ago because of interest rates. What this pretty much comes down to is the idea that young Americans are paying signing loan agreements that are way more than they can actually afford.
“The payments are absolute budget busters. The average car payment for new car buyers was $800 last year, [and] about one in seven buyers has a payment of at least $1,000 a month,” Greg McBride, chief analyst at Bankrate.com, told Yahoo Finance. “There’s no wiggle room there.”
On top of the increasing prices, more and more dealers are apparently pushing customers to finance their vehicles for 36 or 48 months. The shorter options end up being less affordable for folks with unpredictable financial situations.
Don’t worry though, because things are going to get better. Just fuckin’ kidding. They’re about to get even worse. Student loan payments are about to get reinstated, and you know who pays most of those? That’s right, young people. A third of Americans between 25 and 34 have student loan debt, according to the article.
This is about to get even uglier.
