American consumers are increasingly underwater on their car loans
DETROIT — A growing number of Americans with auto loans owe more than their vehicles are worth, according to a report Tuesday from Edmunds.com.
DETROIT — A growing number of Americans with auto loans owe more than their vehicles are worth, according to a report Tuesday from Edmunds.com.
The auto data and consumer research company reports the average amount owed on so-called upside-down loans climbed to an all-time high of $6,458 during the third quarter. That compares to $6,255 in the prior quarter and $5,808 a year earlier.
Upside-down car loans are not necessarily dire on their own, but a growing number of consumers being underwater is another indication of pressure on American consumers.
A sign of that strain came last month, when the Federal Reserve reported delinquency rates on auto loans rose substantially above pre-Covid pandemic levels to end 2023. They had fallen to historical lows during the global health crisis.
“Consumers owing a grand or two more than their cars are worth isn’t the end of the world, but seeing such a notable share of individuals affected at the $10,000 or even $15,000 level is nothing short of alarming,” Jessica Caldwell, Edmunds’ head of insights, said in a release.
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