More Americans Find Themselves Falling Behind On Car Payments

The Net Lender (TNL) has observed, along with a number of experts across the country, that Americans are having more and more difficulty making their car payments. The company, on which more information can be found at Press Advantage, leverages auto titles to offer financial aid to those in need.

According to The Washington Post, a record seven million Americans are at least three months behind their car payments. This is a red flag, according to several economists, and means that Americans are struggling to pay their bills despite the strong economy and low unemployment rate.

“The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market,” say economists at the Federal Reserve Bank of New York. Car payments are often first on a person’s agenda, as a vehicle is essential for getting to work and can be used as a home if all else fails. “When car financial delinquencies rise, it is usually a sign of significant duress among low-income and working-class Americans,” states the Washington Post.

Being three or more months behind on car payments puts one at risk of losing their vehicle, and economists fear that this might signal the beginning of a recession. “The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market,” notes a report by the Federal Reserve Bank, adding that the situation, “warrants continued monitoring and analysis of this sector.”

The past 40 years have seen the American middle class shrink by ten percent, from sixty one percent of the population in 1971 to fifty two percent in 2016. The study defines middle class households as those with incomes ranging from $45,200 to $135,600 per year, with lower-class households currently making less and upper-class households making more than they previously did. In 2017, about 1.8 million vehicles were repossessed, slightly less than the 1.9 million repossessed in 2009, according to ALS Resolvion. The auto industry’s issues may lead to the next recession, some economists fear.

After the financial crisis caused by the housing industry, the government placed strict restrictions on mortgages to make it harder to get financial aid to pay for a home unless the person seeking financial aid could afford the monthly repayments. However, warn a number of experts, the auto industry knows no such restrictions, and it is up to consumers to decide whether or not they can afford the payments. A number of articles meant to inform consumers, and hopefully help them make financial decisions, can be found at Pearl Trees.

The issue is exacerbated by the fact that car prices are rising. The industry has, in recent years, shifted its focus towards bigger, more profitable, trucks and SUVs. Ford, for example, announced it will cease producing smaller passenger car models like the Taurus, Fusion, Fiesta and C-Max models. In 2012, just over half of vehicles were priced under $30,000 and 6% were above $50,000. The end of 2018 saw about 23% of vehicles being priced above $50,000 and only a third below $30,000. “The dream of owning a new vehicle is becoming more elusive to the average American,” says Melinda Zabritski, the senior director at Experian. “To reverse the trend, dealers and lenders need to better understand the data and explore different options to make new vehicle ownership accessible and appealing.”

Some economists believe that the issues Americans are facing are also a result of unethical financial aid strategies used by certain financial assistance agencies. “Predatory practices and a lack of real transportation options leave many households trapped in debt with few ways out,” notes President of U.S Public Interest Research Group Faye Park.

According to an article by The Washington Post, “Fewer than 1% of auto loans issued by credit unions are 90 days or more late, compared with 6.5% of loans issued by auto finance companies.” As University of Utah law professor Christopher Peterson advises, Americans should, “shop separately for the vehicle and the financing.”

There are, however, a number of reliable companies that provide financial assistance, with The Net Lender being a reputable leader in the field. While their services cater more to people who already own vehicles, The Net Lender is a reliable source of financial aid. “The Net Lender is here to help you acquire the cash you need for an unexpected expense or emergency financial situation,” says the company. TNL has a number of locations across the country, ready to provide reliable service to those seeking out auto title assistance.