Auto loan delinquencies are climbing, and repossessions have jumped 43% in the past three years, signaling mounting stress for borrowers. A new report from the Consumer Federation of America (CFA) says auto debt has surpassed $1.66 trillion as delinquencies and repos hit their highest levels since 2009. The surge is tied to rising vehicle prices and upkeep, higher interest rates, and recent tariff effects, with auto loan delinquencies now a prominent warning sign for household finances.
From 2022 to 2024, repossessions rose about 43%. Borrowers with credit scores between 620 and 679 saw delinquency rates nearly double versus pre-pandemic levels. Among 18- to 29-year-olds, 90-day-plus delinquencies are increasing faster than in other age groups. New-car prices are nearing $50,000 on average, while used-car prices are up 6.3% year over year. One in five new-car buyers now pays $1,000 or more per month, and roughly 20% are using 84-month loans—trends the CFA links to deeper repayment risk and more auto loan delinquencies.
The CFA also points to weaker federal oversight. It cites budget cuts at the Consumer Financial Protection Bureau (CFPB) and limited enforcement by the Federal Trade Commission (FTC). The report notes that after the start of the Donald Trump administration, the FTC did not file a single lawsuit against auto dealers, and the popular FTC “CARS Rule” (banning deceptive ads and junk fees) was nullified when the agency did not appeal an adverse ruling.
Industry groups dispute the CFA’s conclusions. The National Automobile Dealers Association (NADA) and the American Financial Services Association (AFSA) argue that higher prices stem from advanced technology, safety regulations, and supply-chain issues—not abusive lending or dealer practices. They call the CFA report sensational and overstated.
“Auto-loan delinquencies are not just a car problem; they reflect broader financial pressure on households,” said Erin Witte, director of consumer protection at the CFA. She urged policymakers to treat the trend as a serious risk and to strengthen protections as repossessions continue to rise.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
