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Old 12 February 2019, 07:49 PM
E. Q. Taft's Avatar
E. Q. Taft E. Q. Taft is offline
 
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Driver A record 7 million Americans are 3 months behind on their car payments

A record 7 million Americans are 90 days or more behind on their auto loan payments, the Federal Reserve Bank of New York reported Tuesday, even more than during the wake of the financial crisis.

Economists warn that this is a red flag. Despite the strong economy and low unemployment rate, many Americans are struggling to pay their bills.

https://www.washingtonpost.com/busin...=.b92f5e1b2496
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Old 12 February 2019, 08:12 PM
dfresh dfresh is offline
 
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Another datapoint showing that the US economy is really not doing well for a lot of people, but I keep seeing that the economy is doing great. There is just such a big divide in our country.
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Old 12 February 2019, 08:43 PM
overyonder overyonder is offline
 
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Quote:
Originally Posted by dfresh View Post
Another datapoint showing that the US economy is really not doing well for a lot of people, but I keep seeing that the economy is doing great. There is just such a big divide in our country.
Wondering: Are people over-extending themselves financially because they feel that the economy is great?

OY
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Old 12 February 2019, 09:45 PM
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According to the report linked from the article, the amount of auto loan debt/leases on credit reports was $584 billion in 2018 and $569 billion in 2017. So if that is happening, it was happening last year too. This article (pdf) has a table showing the amount of debt over the last 10 years divided into mortgage and non-mortgage debt. The amount of non-mortgage debt seems consistent. That doesn't mean that people aren't overextending since it doesn't show what wages were during those time periods. It could be that people are borrowing the same, but making less (or have more bills) and are over-extended that way.
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Old 12 February 2019, 11:18 PM
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E. Q. Taft E. Q. Taft is offline
 
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The way the economy is doing well for the bulk of us is that unemployment remains very low. Wages are even starting to go up at the low end (I've heard they're still pretty stagnant in the middle). But I think a lot of people still feel insecure, or are under-employed, or are stuck in fields that will never pay that well so they can't save.

There's an interesting bit of circular logic in the article, I think, where they note that the rate of defaults is much lower for people who get their loans directly from banks and credit unions rather than going with dealer financing, and advising people to get such loans. Well, yeah, but the banks and credit unions won't loan to the people who are least able to pay the loans back; resulting in people who have less income or shakier credit having to take the higher-interest loans. In one sense it's fair -- I'm a bigger credit risk; the lender has to charge more interest. But in another sense, it's another way that it costs more to be poor.
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