Car Loan Defaults Have Spiked 50%. With Repossession Rates Rising, How Will Americans Get to Work?

Car loan delinquencies have gone up by 50 percent in the last 15 years, a troubling trend considering that many Americans live in transit-poor places where car ownership is essential. Last year, 1.7 million cars were repossessed, the highest number since 2009.

According to U.S. economics correspondent for The Telegraph Melissa Lawford, interviewed in an article by Sean Saldana in Texas Standard, “what’s particularly worrying is what’s happening in the subprime sector. So that’s people who are on low incomes, maybe have bad credit ratings. Among those borrowers, delinquencies are actually at a record high, which means they’re even worse than they were during the financial crisis, which is quite an astounding statistic.”

Lawford attributes this to the rising cost of cars, higher interest rates, and a general squeeze on lower-income households. “And they’re also there at a point where their situation is only going to get worse. I mean, if they can’t drive to work, maybe they’re going to lose their job. It has this kind of waterfall effect.”