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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 better financial decisions by offering interactive financial calculators and tools as well as publishing quality and impartial content. This allows you to conduct your own research and compare information at no cost and help you make informed financial decisions. Bankrate has partnerships with issuers, including but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this site are from companies that compensate us. This compensation may impact how and when products are featured on this site, including for instance, the order in which they may be listed within the categories of listing and other categories, unless prohibited by law for our mortgage, home equity and other home loan products. However, this compensation will have no impact on the information we publish, or the reviews you see on this site. We do not cover the vast array of companies or financial offers that may be open to you. Jackal Pan/Getty Images

3 minutes read. Published on December 19, 2022.

Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ways and pitfalls of borrowing money to buy an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers gain confidence to control their finances through providing precise, well-researched, and well-documented facts that break down complicated subjects into digestible pieces. The Bankrate guarantee

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You have money questions. Bankrate has answers. Our experts have helped you understand your money for over four decades. We strive to continuously provide consumers with the expert advice and tools required to succeed throughout life’s financial journey. Bankrate follows a strict standard of conduct, so you can rest assured that our content is truthful and reliable. Our award-winning editors and reporters produce honest and reliable content to help you make the best financial decisions. The content created by our editorial team is factual, objective, and not influenced by our advertisers. We’re honest regarding how we’re capable of bringing high-quality content, competitive rates, and useful tools to you by explaining how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and services or through you clicking certain links posted on our site. This compensation could impact how, where and in what order products appear within listing categories, except where prohibited by law. We also offer mortgage, home equity and other products for home loans. Other elements, like our own website rules and whether a product is available within the area you reside in or is within your personal credit score may also influence how and where products appear on this website. While we strive to provide a wide range offers, Bankrate does not include the details of every credit or financial product or service. The third quarter of 2022 brought an exploration about »the « new normal » after the pandemic, fear of the looming and the increase in household debt. The most notable is that auto loan debt climbed to $1.52 billion, which makes more than 9 percent of household debt. Additionally, the debt has risen up to levels close to pre-pandemic, in the third quarter of the report, with delinquencies of 60 days for new automobile loans in the range of 0.48 percent and used car loans at 1.17 percent. An unfortunate mix of factors have led to this rise on automobile loan debt. One reason is the supply chain issues, which have caused the market with record prices for cars. Another is the general risk for those who borrow. This is especially relevant for those who hold a higher likelihood of being in debt or failing to make a payment. Debt and delinquency statistics All-around loan balances increased 7.6 percent during the 3rd quarter in 2022. The across the country is $5,210. Since the start of 2022 the rate has increased by 1.77 percentage points for a 60 month new vehicle loan and 1.78 percent points on a used 48-month car loan. The amount of loans that are 30 days past due have increased to 2.19 per cent in 2022’s third quarter compared the 1.66 percent in 2021. The percentage of loans that are 60 days past due have increased up to 0.81 percent in the third quarter of 2022 as compared the 0.55 percent in 2021. Men are able to get 16.3 percent more than women. The total amount of auto loan and lease was 1.43 trillion in 2021 as compared the 1.6 trillion for student loans.

The scarcity of cars has pushed prices higher One reason for the growth in the amount of auto loan debt in recent years has been fewer cars available, explains Bankrate Chief Financial Analyst Greg McBride, CFA. « The shortage of new vehicles created a scarcity that pushed prices up and bled over into used vehicles as more car buyers moved towards this trend, » McBride says. And while this trend has been building, « there was an explosion in prices paid and loan balances financed once the pandemic struck. » McBride furthers this point by explaining that there’s no more awe-inspiring location to observe families living paycheck to paycheck than the driveway. Drivers have been confronted with pricey vehicles due to problems with supply chains, which resulted in budget-busting payments. How the economy affects the amount of debt economy directly impacts the ability to purchase, finance and pay off new or used cars in terms of costs and available interest rates. In addition, with 43 percent of economists forecasting that recession will continue to expand over the next 12-18 months, it’s just one of the expenses that will cost more. However, even if people are able borrow money to purchase a car in the first place due to the high interest rates, delinquency and credit card debt a probable possibility for many borrowers. Simply, as the economy grapples with steep inflation rates, the has been working to stop the problem by raising the rate of reference. The benchmark rate was has been set at 4.25-4.5 percent in December. This rate determines the amount banks are able to charge for lending funds to banks that do not have a bank, which then affects interest rates for consumer goods like automobile loans. Although relief was offered with the help of car prices declining, high rates may increase the number of people who are in debt payments and into debt. There is a challenging dichotomy between vehicles that are less expensive . However, as is shared optimistically in the article, serious auto loan late fees are anticipated to decrease modestly to 1.9 percent by 2023, from 1.95 percentage in 2022. Averagely, drivers pay the equivalent of $750 a month for a brand new car, or $525 for a month as of this third quarter, 2022. The consumer price index was at 298.1 at the mid-December timeframe, which is up from 278.9 last year. The average loan term for subprime lenders financing new vehicles were 74.25 during the 3rd quarter in 2022. Average interest rate for new cars during the 3rd quarter in 2022 was 5.16 percent and 9.34 percent for used cars. There’s the risk of 65 percent of a recession by mid-2024 according to an .

How to get out of the debt. While debt that has been incurred may appear impossible, there’s still concrete you can take to get out of the hole that late or missed payments have caused. Americans were in debt on average of $96,371 by 2021therefore if you’ve experienced a debt crisis it’s not an isolated situation. Take note of these tips when trying to get out of the burden of debt. Consider debt consolidation An debt consolidation loan is a form of your debt. By using it, you will reduce the cost of interest and help you pay back the debt more quickly. To find the best debt consolidation loan you can look through a variety of offers. Like any loan, apply for preapproval in order to secure the lowest rate you can get. Reassess your budget If you have more debt than what you have on your bank account it might be a good time to . To adjust the amount you spend begin by taking a look at how much you spend and what you’re spending it on. Look for common-cost items that you can eliminate or cut back. Any additional cash that shows up could be used to pay off your credit card. Make a request for loan modification if you’re in danger of being late in your car loan It is a means to modify your current loan to better suit your financial circumstances. In contrast to the previous method, this one involves your current lender and will change your loan terms. Be aware that not all lender will be willing to change the terms of an loan, and you may require proof of your hardship.

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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of borrowing money to buy 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 by providing precise, well-studied information that break down complex topics into manageable bites.

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