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Auto loan delinquencies and repossessions are on the rise – Brospar Daily News

As many Americans run out of pandemic stimulus funds, debt is starting to rise again and is leading to signs of trouble, especially in the auto industry, where car foreclosures are on the rise.

“They expect the national average to come back around 2.2 million in 2022, so when you get back to the 1.7 million mark in 2019, of course that’s a relatively large increase,” Chris said. Benson, vice president of collections at Ent, an A credit union with about $7 billion in assets.

According to data released by the New York Fed in May, my country’s auto debt increased by $87 billion in the year to March 2022.

Some of this growth can be attributed to the used car market, as car values ​​increased by more than $10,000 last year, but some of this growth can also be attributed to discretionary spending practices that the pandemic has provided for some, Benson said. .

“You know, looking at the last two years, you have to consider the government assistance programs offered to members, the moratorium on foreclosures, the recovery fund. I think that’s had a major impact on keeping late fees, seizures and foreclosures at least to a minimum impact,” Benson said.

There is no federal database that tracks the number of auto loan defaults or repossessions, but there are entities that can take snapshots. In June, Ford’s chief financial officer said delinquency rates were rising, and in August car news site Jalopnik conducted an analysis showing that car repossession rates for subprime borrowers rose. by 11% since 2020, while primary borrowers The car recovery rate has doubled from 2% to 4% for people with good credit scores.

If you find yourself in a difficult situation with your loan, be completely transparent with your lender, Benson said. He said there are workarounds, such as reducing the monthly payment or putting your loan on hold for a short time when your finances are healthy.

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