Data: New York Fed Consumer Credit Panel, Equifax; Chart: Andrew Witherspoon/Axios
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This is a picture of distress.Car loans are the last debt that Americans generally default on, since a car is in most cases necessary to get to work.
The big picture: The number of Americans in default on their car loans is hitting record highs, but the default rate is not: Auto lenders have been issuing many more loans in recent years.
"The overall performance of auto loans has been slowly worsening, despite an increasing share of prime loans in the stock," write New York Fed analysts.
Whom you borrow from makes a huge difference. 6.5% of loans from auto finance companies are 90+ days past due, compared with only 0.7% of loans from credit unions.
Why you’ll hear about this again: This degree of woe is happening despite a growing economy and record-low unemployment. If and when a recession hits, expect these numbers to get a lot worse.
