investmentwatchblog.com / by Umar Farooq / FEBRUARY 22, 2017
Lending subprime auto loans to drivers has reached its peak point in a decade, with U.S. auto debt hitting a record $1.16 trillion in the last quarter of 2016, according to a report from the Federal Reserve Bank of New York. This spells bad news for automakers, who may soon be at the receiving end of their own generous deal-making in the next financial crisis.
Auto loan balances increased by $22 billion, continuing their steady rise. Auto loan delinquency rates deteriorated again, with 3.8% of auto loan balances 90 or more days delinquent on December 31, 0.2% above last quarter, according to the report from the New York FED.
It’s an alarming number, big enough to incite talk of a bubble. In fact, the pile of debt would cover the cost of 43.4 million Ford F-150 pickups, one for every eight or so people in the country. Another way to look at: Every licensed driver in the U.S., on average, owes about $6,100 in car payments.
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