Auto Loans Are Getting Worse, But Every Other Type of Loan Is Getting Better

Yesterday I read a whole spate of stories about the growing number of people who are 90 or more days delinquent on their auto loans. For example:

A record 7 million Americans are 90 days or more behind on their auto loan payments, the Federal Reserve Bank of New York reported Tuesday, even more than during the wake of the financial crisis. Economists warn that this is a red flag. Despite the strong economy and low unemployment rate, many Americans are struggling to pay their bills.

Today I finally got curious enough to look at the Fed report where this came from. It’s true, it turns out, that this is a record number in absolute terms, but that’s because the number of auto loans is twice as high as it was in 2010—and higher than it was even during the pre-2007 housing boom. More loans means more defaults, which makes absolute numbers sort of meaningless here. Instead, let’s look at a chart showing loan delinquencies in percentage terms:

Every type of loan delinquency is either flat or down with the single exception of auto loans. Overall, delinquencies have been declining since 2009 and are still declining. And even auto loans are getting worse at a pretty slow rate. But here’s an interesting additional chart:

Over the past three years, the delinquency rate on auto loans has stayed steady for those under 40. The increase in delinquency is entirely due to the middle-aged and elderly. I’m not quite sure what to make of this, but it seems like it must mean something.

In any case, the takeaway here is that auto delinquencies are rising, and this might indeed foreshadow problems. But nothing special happened in the past quarter or even in the past year. It’s just been a slow and steady march upward since 2014.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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