Vehicle Repossessions Rise as High Prices and Rates Strain Consumers
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Car repossessions have risen as high vehicle prices forced consumers to take larger loans. In September, 6.11% of auto borrowers were at least 60 days late on payments - the highest level in nearly 3 decades.
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Although delinquencies rose for a 5th straight month in September, actual defaults declined by 9.8% from last year.
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Analysts estimate 1.5 million vehicle repossessions by end of 2023, up from 1.2 million in 2022, but below pre-pandemic levels.
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Average new car loan rate jumped to 7.4% in September, up from 6.9% in January. Used car loan rate is 11.4%.
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Percentage of consumers paying over $1,000 a month for a vehicle hit a record 17.1% in Q2 2022 as rates and prices surged.