Record-high car payment delinquencies signal economic distress

Americans are missing car payments at a record high, with nearly 6.6% of subprime borrowers 60 days or more overdue as of January 2025. This rate has increased from 2.58% in May 2021, signaling economic stress. Rising vehicle prices, insurance, and repair costs are contributing to this trend. The average new car now costs $47,000, and borrowing rates have exceeded 9% for new cars and nearly 14% for used ones. President Trump's trade policies may further increase vehicle prices by up to $10,000. The economic outlook remains uncertain, with officials acknowledging the possibility of a recession but ruling out a financial crisis.