Dealership Putting Customers In Cars With $3,000 Monthly Payments

A New York Fed survey published earlier this week indicated that, in the fourth quarter of 2023, auto loan delinquencies reached levels not seen since right after the Great Recession more than a decade ago. 

As a refresher, the data from Tuesday by the Federal Reserve Bank of New York showed (read: ZH report here) the rate at which car owners are behind on their payments hit an annualized rate of 7.7%, the highest level since 2010. 

“Delinquency transition rates have pushed past pre-pandemic levels, and the worsening appears to be broad-based,” researchers at the NY Fed wrote in a blog post. 

Given that we already covered this in a report titled Credit-Card & Auto Delinquencies Soar, Especially Age Group 18-39, as well as other eye-opener credit reports in recent weeks:

… perhaps there is reason to believe an increasing number of households have hit the proverbial brick wall despite the Biden administration cheering ‘Bidenomics’ on legacy corporate media outlets. 

The households who piled on insurmountable auto and credit card debt through the Covid era and the current high-interest rate environment are likely the folks running into financial turmoil. 

An Edmunds report from last year showed the percentage of drivers with plus $1,000 monthly payments jumped to an all-time high of 17.1% in the second quarter of 2023 compared to 16.8% in the first quarter. The reason is that the average amount financed for a new vehicle is around $40,000, plus auto loan rates are at a generational high.

“The double whammy of relentlessly high vehicle pricing and daunting borrowing costs is presenting significant challenges for shoppers in today’s car market,” Edmunds’ director of insights Ivan Drury said last year. 

This leads us to two posts made by X user Clown World. They shared what appears to be an auto dealer sharing several images online of new customers financing vehicles with payments that are as much as monthly mortgage payments. 

One person purchased a 2023 Tahoe with $2,550 monthly payments on an 84-month term! 

Another person bought a 2023 Sierra 2500 Denali with $3,000 monthly payments, locked in a 96-month term!