The growing costs to buy and maintain a vehicle are leading to rising auto loan delinquencies, repossessions and a potential crisis for U.S. consumers, according to USA Today Network.
A new report by the Consumer Federation of America warns that inflation, tariffs and high borrowing costs are making car ownership increasingly unaffordable. The average vehicle now sells for nearly $50,000, with almost 20% of new buyers paying at least $1,000 a month. Nearly one in five new buyers is locked into a seven-year loan, while used car prices climbed 6.3% year over year in June.
Americans collectively owe more than $1.66 trillion in auto debt, the CFA says. The organization is sending the report to members of Congress calling for an end to “exploitative practices,” including interest-rate kickbacks where dealers and lenders inflate rates and share profits.
Car buyers with above-average credit scores (620-679) were twice as likely to fall behind as they were before the pandemic. Borrowers ages 18 to 29 are also falling 90 or more days late on auto loans at a faster rate than older borrowers.
Repossessions are at their highest level since 2009 and have increased by an estimated 43% from 2022 to 2024.
