Auto loan debt reaches $1.52 trillion Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by providing you with interactive tools and financial calculators that provide original and objective content. We also allow you to conduct research and compare data for free – so that you can make informed financial decisions. Bankrate has agreements with issuers such as, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this site come from companies that compensate us. This compensation can affect the way and where products appear on this website, for example such things as the order in which they may be listed within the categories of listing, except where prohibited by law for our loan products, such as mortgages and home equity and other home lending products. This compensation, however, does affect the content we publish or the reviews you see on this site. We do not contain the entire universe of businesses or financial deals that might be accessible to you. Jackal Pan/Getty Images

3 min read Published on December 19, 2022.

Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the details of borrowing money to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are dedicated to helping readers gain confidence to take control of their finances by providing clear, well-researched information that breaks down complicated subjects into digestible pieces. The Bankrate promise

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who ensure everything we publish ensures that everything we publish is accurate, objective and trustworthy. Our loans reporter and editor are focused on the things that consumers care about the most — the various types of loans available, the best rates, the best lenders, the best ways to repay debt, and more — so you can feel confident when investing your money. Integrity of the editing

Bankrate adheres to a strict code of conduct , so you can trust that we put your interests first. Our award-winning editors and reporters provide honest and trustworthy content to aid you in making the best financial choices. The key principles We appreciate your trust. Our mission is to provide our readers with accurate and unbiased information, and we have editorial standards in place to ensure that this happens. Our reporters and editors rigorously fact-check editorial content to ensure that the information you’re reading is true. We maintain a firewall between advertisers as well as our editorial staff. Our editorial team does not receive direct compensation through our sponsors. Editorial Independence Bankrate’s editorial team writes on behalf of YOU – the reader. Our aim is to provide you the most accurate advice to help you make smart financial decisions for your personal finances. We follow strict guidelines to ensure that our editorial content is not affected by advertisements. Our editorial staff receives no any compensation directly from advertisers and our content is verified to guarantee its accuracy. So whether you’re reading an article or a review, you can trust that you’re getting reliable and reliable information. What we do to earn money

If you have questions about money. Bankrate has the answers. Our experts have been helping you manage your finances for more than four decades. We are constantly striving to give our customers the right advice and tools required to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct , so you can trust that our content is honest and precise. Our award-winning editors, reporters and editors produce honest and reliable content that will help you make the right financial decisions. The content we create by our editorial team is factual, objective and uninfluenced by our advertisers. We’re open regarding how we’re in a position to provide quality content, competitive rates and useful tools for you by explaining how we earn our money. is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and services or by you clicking on certain links posted on our website. Therefore, this compensation may influence the manner, place and when products appear in listing categories and categories, unless it is prohibited by law for our mortgage home equity, mortgage and other products for home loans. Other elements, like our own proprietary website rules and whether the product is offered in the area you reside in or is within your own personal credit score can also impact the manner in which products appear on this site. Although we try to offer the most diverse selection of products, Bankrate does not include information about every credit or financial product or service. In the third quarter in 2022, we saw an exploration into”the “new normal” following the pandemic, anxiety about the threat of a new outbreak, and the increase in debt for households. The most notable is that automobile loan debt hit $1.52 billion. That makes over 9 percent of household debt. Additionally, the debt has risen to near pre-pandemic levels according to third quarter report, with 60-day delinquencies for new automobile loans in the range of 0.48 percent, and used automobile loans in the range of 1.17 percent. An unfortunate mixture of causes has led to this increase of the amount of auto loan debt. One is remaining supply chain issues leaving the market with record prices for cars. Another is the general risk for borrowers. This is especially relevant for those who hold a higher likelihood of falling behind or missing the payment. Statistics on delinquency and debt loan balances increased 7.6 percent during the 3rd quarter in 2022. The total across the United States average is $5210. Since the start of 2022, the rate has increased by 1.77 percentage points for a 60 month new car loan or 1.78 percentage points for a used 48-month car loan. A loan that is 30 days late were increased up to 2.19 percent in the third quarter of 2022, compared with 1.66 percentage in 2021. The percentage of loans that are 60 days past due have increased to 0.81 per cent in the 3rd quarter of 2022 compared the 0.55 percent in 2021. The average male has 16.3 percent than women. The total amount of automobile loan and lease total was 1.43 trillion by 2021 compared the 1.6 trillion for student loans.

A scarcity of vehicles has led to higher prices. The main reason for the rise in auto loan debt over the recent years is the lack of cars on the market, says Bankrate chief financial analyst Greg McBride, CFA. “The shortage of new cars resulted in a shortage, which pushed prices up, and this bled over into used vehicles when more car buyers shifted toward this trend,” McBride says. And while the trend is growing, “there was an explosion in prices paid and loan balances that were financed after the pandemic hit.” McBride furthers this argument by saying that there’s no better location to observe families living paycheck to paycheck than in the driveway. Drivers have been met with pricey vehicles due to problems with supply chains, which resulted in high-cost payments that are a burden on the budget. What affects the economy on the amount of debt economy directly affects drivers’ ability to purchase, finance and repay new or used cars in terms of costs and available interest rates. In addition, with nearly 43 percent of the economists predicting that recession is likely to expand over the next 12-18 months, this is only one of the expenses that will cost more. However, even if people are able to finance a vehicle upfront, the high-interest rates make debt and delinquency a possible reality for a lot of customers. Simply, as the economy is struggling with high inflation rates and rising interest rates, the government has been trying to curb the issue by increasing the benchmark rate. The benchmark rate, has been set at 4.25-4.5 percent during December. This rate determines the amount banks are able to charge for lending money to other banks. This will affect the interest rates of consumer goods like automobile loans. Although relief was offered through the form of lower vehicle prices declining, high rates can increase the amount of people falling behind on payment and falling into debt. There’s a conflicting perception between less expensive vehicles . As optimistically stated in the report, serious auto loan late fees are predicted to decrease modestly to 1.9 percent in 2023 , down from 1.95 per cent in 2022. Averagely, drivers pay about $700 a month to purchase a brand-new car as well as $525 monthly for a used car as of the third quarter of 2022. The consumer price index was at 298.1 at the mid-December timeframe, which is up from 278.9 a year ago. The average term for subprime borrowers who finance new cars is 74.25 in the third quarter of 2022. The average interest rate for brand new cars during the 3rd quarter in 2022 was 5.16 percent and 9.34 percent for used vehicles. There is a 65 percent risk of a recession before the middle of 2024, according to the .

How to escape debt Although debt may feel inescapable there are still steps you can take to escape the gap that late or missed payments have created. Americans have an average debt of $96,371 by 2021therefore if you’ve fallen into deep debt, you aren’t alone. Use these suggestions to help you remove yourself from the burden of debt. Look into debt consolidation. An consolidating debt loan is a form of your debt. With it, you can save on interest and help you repay debt at a faster rate. To locate the most effective debt consolidation loan there are a few options. Like with every loan one should seek preapproval in order to secure the most favorable rate. Reassess your budget If you’re owing more than what you have on your bank account it might be an ideal time to . To adjust your spending first, take a look at how much you’re spending and what are you spending your cash on. Look for common-cost items that you can eliminate or reduce. Any extra money that is piled up can be used to repay your credit card. Make a request for loan modification if you’re at risk of falling behind on your auto loan, is a way to alter your current loan to better suit your financial situation. This process is different from the other one. It is done with your current lender and will change the loan conditions. Keep in mind that not every lender will agree to modify an loan and you may need to provide proof of your financial hardship.


The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ins and outs of securely borrowing money to purchase an automobile. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain confidence to manage their finances through providing clear, well-researched information that breaks down otherwise complicated topics into digestible pieces.

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