Rising Car Payment Defaults Signal Troubling Economic Outlook

The rate of subprime borrowers behind on auto loan payments by more than 60 days reached a record high of 6.11% in September, according to Fitch Ratings. This indicates ongoing economic struggles for lower-earning workers amid high inflation, a challenging job market, and the resumption of federal student loan payments. Delinquency rates are expected to continue rising, peaking at around 10% before declining. The high interest rates and increasing reliance on borrowing are contributing factors. Vehicle repossession rates are also on the rise, leaving many without transportation.