The skyrocketing prices of motor vehicles are no longer “breaking news.” As costs continue to rise to unaffordable levels for many consumers, the likelihood of repossessions goes beyond fear and becomes an inevitability.
Regardless of the surrounding circumstances, late car payments are becoming a reality for more and more consumers. For many, catching up is an uphill climb, with many facing interest and penalties that grow out of their reach.
Statistics reveal struggles
According to Experian, certain generations of buyers are more prone to missed payments and the threat of repossession. One of the more stark differences is how segments of the population finance their vehicles and the variances of loans, costs, and delinquent payment histories.
Consumers categorized as Generation Xers (born between 1965 and 1980} have the highest likelihood of carrying more than one auto loan. In addition, they pay more on their auto bills than other age groups.
The Federal Reserve Bank of St. Louis found that at the start of the year, millennials continued to run behind Gen X and baby boomers in building wealth. However, they, along with those categorized in Generation Z, were more likely than all older segments to have one car loan. Yet, their monthly installments increased year over year. The younger set is still more likely to take out loans than other generations and subsequently face challenges in making those installments.
Comparatively, those born from 1928 to 1945 are least likely to carry an auto loan. Fifty percent of baby boomers are in the process of paying down at least one auto loan.
The jump in price is impacting all consumers. Kelley Blu Book reported that the first quarter of 2013 saw average prices at $31,526. Fast forward to the first quarter of 2022, average sticker prices were at nearly $50,000.
