The delinquency rate of car loans in the United States has soared by 50%! Previously the safest loans have now become a "high-risk area".

The latest research shows that over the past 15 years, due to the skyrocketing prices of cars and rising interest rates, auto loans in the United States have shifted from being one of the safest consumer credit products to one of the riskiest categories, with delinquency rates rising by over 50%. Credit scoring company VantageScore points out that consumers from all income levels are facing difficulties in making monthly payments on their car loans. Auto loans were once seen as a safe harbor in the credit field, with car owners typically prioritizing their car loans over other debts. However, since 2010, delinquency rates on car loans have significantly increased, while credit card and personal loan risks have improved. VantageScore found that the increase in monthly car loan payments has exceeded that of mortgage payments. VantageScore's Chief Economist, Rikard Bandebo, stated in an interview, "We found that the costs of cars themselves and related expenses have been increasing significantly, and in the past five years, this increase has accelerated even further." Data from automotive research institution Cox Automotive shows that since 2019, new car prices have risen by over 25%, with the average price now surpassing $50,000. According to automotive research platform Edmunds.com, in the third quarter of this year, the average monthly payment for a new car reached $767, with one-fifth of borrowers paying over $1000 per month. Meanwhile, new car loan rates have exceeded 9%, further exacerbating the crisis of car affordability. "This is a double whammy," Bandebo said, "Consumers are not only facing the pressure of rising car prices, but also the burden of increasing financing costs for their car loans." No income group has been spared. The study found that due to financial institutions tightening financing standards for borrowers with the lowest credit ratings three years ago, the delinquency rates for prime and near prime credit groups (those with typically good credit scores) now exceed those of subprime borrowers. Bandebo explained, "Higher income groups often tend to believe that they can afford to buy more expensive cars." Data from VantageScore shows that since 2010, the average balance of car loans has increased by 57%, exceeding the growth of all other credit products. To reduce monthly payment pressure, buyers are increasingly choosing to extend loan terms to 7 years or longer. This has led to more and more consumers falling into a "negative equity" situation - where the amount owed on the car loan exceeds the actual value of the vehicle. As American consumers continue to purchase higher-priced trucks and SUVs, and as manufacturers reduce the number of economical vehicle models, the trend of car loan delinquencies may be difficult to reverse in the short term. "Consumers' financial situations are more unstable now than at any point since the last economic recession," Bandebo said. "Over the past few years, we have seen more and more consumers struggling to balance their budgets, and it seems that this trend will continue into next year."