Personal Finance

3803 readers

1 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 2 years ago

MODERATORS

WandererLagomorph799@lemmy.ml

nieceandtows@programming.dev

nieceandtows@lemmy.ml

Car Repossessions Surge 23% as Americans Fall Behind on Payments (www.bloomberg.com)

submitted 1 year ago by return2ozma@lemmy.world to c/personalfinance@lemmy.ml

32 comments fedilink hide all child comments

Paywall removed https://archive.is/NFELy

you are viewing a single comment's thread
view the rest of the comments

[–] davel@lemmy.ml 6 points 1 year ago (9 children)

Not yet, anyway.

[–] protist@mander.xyz 16 points 1 year ago (8 children)

I can't count how many times I've heard people say "another 2008 is coming" over the past 5 years, yet here we are without another 2008.

In June, the percentage of subprime auto borrowers who were at least 60 days late on their bills in June was 5.62%, down just slightly from a record in February, according to Fitch Ratings.

A Fed rate cut could provide some relief. Traders are anticipating the US central bank will begin lowering its benchmark rate in September, following data showing inflation cooling. That, in turn, could allow borrowers the chance to refinance or enter the market to buy something else.

At a very fundamental level, this is nothing like 2008. What's happening here is pretty much just an intended effect of the Fed raising interest rates, which has made car payments more expensive, so more people are unable to afford them.

[–] davel@lemmy.ml -1 points 1 year ago (2 children)

The Fed raising rates only affects recent car buyers, so it can’t account for a 23% surge. What the Fed raising rates does do—and is intended to do—is cause unemployment, which inevitably results in missed car payments, and even missed mortgage payments.

[–] protist@mander.xyz 4 points 1 year ago* (last edited 1 year ago) (1 children)

so it can’t account for a 23% surge.

Why not? I don't see this logic

The Fed raising interest rates affects lots of things directly, including the cost of home and auto loans, not just unemployment rates, which are indirectly affected

[–] sugar_in_your_tea@sh.itjust.works 4 points 1 year ago* (last edited 1 year ago)

Exactly. Auto loans are relatively short-term, and you're probably more likely to default relatively early into the loan than later, esp. since you would no longer be upside-down later on.

load more comments (5 replies)