6 million Americans have stopped paying their car loans, and it’s becoming a ‘significant concern’…
•The subprime delinquency rate for the trailing four quarter period moved to 2% in the third quarter. The only other time it was 2% or more was in the aftermath of the financial crisis…
•Outstanding subprime auto loan balances now stand at $280.2 billion, a record high. For perspective, the pre-crisis high was $249.5 billion, in the fourth quarter of 2007…
According to UBS research, 65%, 36%, and 22% of lower-, middle-, and higher-income cohorts are “stressed.” That means their income falls below or barely covers their expenses. And almost one in five stressed households, or 18%, agreed or strongly agreed with the likelihood of a default over the next year.
When these stressed households were asked what debt they were most likely to default on, auto loans ranked third, behind credit cards and student debt.
From a practical standpoint I would imagine utilities and rent weren’t asked, since they are not debt. Most of those 6 million defaults are probably hungry a lot, behind on their rent and utilities, have dramatically cut all other expenditures, have defaulted on credit card debt and student loans, and are now still about to take down the subprime auto lenders.
Of course the idea of vacations, entertainment, and other simple pleasures are probably totally out of reach. That means no dopamine, and amygdalae that are triggering more easily at the stresses in the world, and driving action to remediate them.
Again, all of this is nothing compared to what will come in the Apocalypse, when it hits. We will go K, and do it hard.
Tell someone new about r/K Selection, because irritated amygdalae kill SJWs when they understand r/K
[…] Amazing numbers here: 6 million Americans have stopped paying their car loans, and it’s becoming a ‘significant concern’… •The subprime delinquency rate for the trailing four quarter period moved to 2% continue […]
Some of the defaulted loans are as you describe. But a large percentage are for luxury vehicles bought fraudulently with either stolen identity or have no intention of paying for them. This type of fraud has been growing in recent years. Talk to the repo men and car credit analysts.
“Of course the idea of vacations, entertainment, and other simple pleasures are probably totally out of reach.”
Or does it mean they still take vacations and entertainment, but then default on necessities. I recall a guy talking about his 1960’s drug usage.
“You’d be bored and get high…. two weeks later you’d be back down with nothing in the ice-box and get high again. Two more weeks later, they’ve taken your ice-box”
In this description, notice getting angst relief was more important than necessities, like food, or keeping your fridge. But solving that dopamine crisis is doable. So Maybe there is a miss allocation of resources to r activities away from K ones.
That said, when there are no longer enough means to make the ends meet, something will get cut. And cutting K activites will in the end result in cutting of all activites.
Yeah I wonder. It my break down, with hard r’s doing that, and normal people going without luxuries. The fact Trump got elected in the face of all the media resistance makes me think there may be a lot of people with no dopamine on the side.
hollly funkin shit
I have it on good authority from family who work for a major credit card corporation that the very last thing people will default on is their credit card.
Car loans? Who cares, people are used to defaulting on them but having their ban on new auto loans last only until the industry has another opportunity to securitize loans and sell them on to other rubes (usually pension funds, I suspect.) It was only a few years ago that “fog a mirror” loans were available, then they blew up, and more recently they were available again. Until Mt. Vesuvi-debt erupts and utterly destroyed the debt/leverage fueled world we now assume is permanent, this sort of thing can go on like the Energizer Bunny. With rates climbing since summer, though, if it’s a trend change to higher rates, the mountain is rumbling….