petite6 |
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Jokers Wild |
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Reged: 08/14/06 |
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More Americans are struggling to make their monthly car-loan payments, one of the clearest indications that low- and middle-income families could be starting to buckle, even as the U.S. economy 10/21/25 11:21 AM
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https://bsky.app/profile/nytimes.com/post/3m3n5vqrwdx2z
Inflation and a tough job market are making it harder for some people to pay back the car loans they signed in better times.
Oct. 20, 2025, 5:03 a.m. ET More Americans are struggling to make their monthly car-loan payments, a sign that lower-income consumers are under growing financial pressure. The share of subprime auto loans that were 60 days or more past due reached a high of nearly 6.5 percent in January and has lingered near that level, according to Fitch Ratings. Repossessions have swelled, more drivers are trading in vehicles that are worth less than they owe and lenders such as CarMax and Ally Financial have warned investors about auto loan performance. Despite stubborn inflation and punishing tariffs, the U.S. economy on its surface has appeared to hold up relatively well. The stock market continues to climb, company executives for the most part remain upbeat and consumers overall are still spending. But the weakness in the auto market is one of the clearest indications that low- and middle-income families — the economy’s foundation — could be starting to buckle. Because many Americans need their cars to get around, auto loan delinquencies can be a telling gauge of financial hardship. “Is this evidence that we have some consumers under stress?” asked Jonathan Smoke, the chief economist at Cox Automotive, a research firm. “I would say yes, most definitely.” Jennifer Alba, 48, decided to buy her first car while she was stuck on Seattle’s light rail for an hour one day in November 2021. She found a maroon 2018 Subaru Outback online, lined up a six-year, $565-a-month loan from Ally Financial, hopped off the train and headed straight for the dealership. Ms. Alba, who was making about $100,000 a year and had received a small inheritance after her grandmother’s death, made a $1,500 down payment. She named her car “Ruby Subie” and made plans to take it camping.
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