Car Delinquencies Are on the Rise: What You Can Do To Protect Yourself

Core Insights - High car prices are creating a financial emergency in America, with new car prices averaging nearly $50,000 and 20% of new car buyers paying $1,000 or more monthly, leading to a total auto debt of $1.66 trillion [1][2] Group 1: Financial Situation - The rising levels of auto debt have resulted in increased defaults, delinquencies, and repossessions, nearing levels seen before the Great Recession [2] - The Consumer Federation of America highlights the precarious financial situation many Americans are facing due to high car prices and debt [2] Group 2: Budgeting and Financing Tips - It is essential to create a realistic budget before purchasing a car, considering all associated costs such as insurance, maintenance, and gas [3] - Shopping around for better financing rates is crucial, as different lenders may offer varying rates, with online lenders often providing lower rates due to reduced overhead costs [4] - Choosing a lender that can service the loan properly is important, and extending the loan term to lower monthly payments can lead to paying more in interest and being underwater on the loan [5] Group 3: Strategies to Avoid Delinquency - Putting more money down when buying a car can reduce monthly payments and build equity, making it easier to sell the car if payments become unmanageable [6] - Paying cash for an older car eliminates the risk of delinquency entirely, as there would be no loan involved [7]