Smart Borrower Blog

Serious Auto Loan Delinquencies Reach All-Time High

Feb 14th, 2019 @ 1:29 PM by Amber Nelson

More Americans are seriously delinquent on their car payments than ever before, according to new data from the Federal Reserve Bank of New York, a troubling sign amid a growing economy.

Almost 7 million U.S. consumers are now behind on their auto loans by 90 days or more, the highest figure in the 19-year history of the Bank’s car loan data. Delinquencies have been steadily climbing since 2011 at the end of the Great Recession.

“That is more than a million more troubled borrowers than there had been at the end of 2010 when the overall delinquency rates were at their worst since auto loans are now more prevalent,” wrote New York Fed economists in a blog post. “The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market.”

The increase in seriously delinquent loans is surprising considering that most car loans originated in 2018 were made to borrowers with great credit – those with credit scores around 720. Certainly the majority of the delinquencies are coming from borrowers with subprime credit – those below 620, but “the overall performance of auto loans has been slowly worsening, despite an increasing share of prime loans in the stock.”

The general improvement in the economy has not caught up with everyone, apparently. Health care costs and child care fees have climbed at higher rates than wages in the past several years. And recent data from Pew Research shows that the average American wage in October 2018 only had the purchasing power it had 40 years ago.

The Fed’s data also shows that younger borrowers are struggling much more than their older counterparts. There was a “sharp worsening” in delinquencies among the under 30 crowd between 2014-2016. Student loan debt may be the biggest factor in keeping them from managing all their payments.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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