Per Bloomberg

American car owners are struggling to pay for their autos, resulting in delayed car payment rates reaching new hights. The new numbers surpassed the previous 2009 numbers for the highest delays.

In Dec 2022, the number of subprime auto borrowers with a delay of at least 60 days increased massively from 2.58$ in April 2021, its seven-year low point, to 5.67%, per Fitch Ratings.

This was a significant increase from the rate of delayed car payments during the Great Recession, which peaked at 5.04% on Jan 2009. The struggle to make car payments comes amid the high interest rates.

The higher rates also make it difficult for people to take out new loans. The new auto loan rate grew from 5.15% in Dec 2021 to 8.02% in Dec 2022, just a year ahead, per Cox Automotive.

This rate could be higher for subprime borrowers that do not qualify for good rates on their auto. The struggle for auto loan borrowers has resulted in higher vehicle repossessions.

An example of this is in Manheim where an auto auction company saw an 11% in 2022 compared to a year before. Upon repossession, the borrower's credit score would be affected even more, making it harder for them to take out another loan at a good rate.

Per Experian, the repossession of a person's vehicle could stay on their credit report for around seven years. The timeframe that a lender can repossess a vehicle depends on the state they are in, per the FTC.

Despite the struggle of borrowers to pay for their vehicle loans, Lambos are reportedly sold out until 2024. This means that its production already has pre-orders, and the company only needs to fulfill them.

The news comes as Biden is trying to call for a 20% minimum tax on billionaires and other provisions toward new ways to tax individuals. This includes wanting to quadruple the surcharge on corporate stock buybacks.

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