7 million Americans behind on auto loan payments, New York Fed says

7 million Americans behind on auto loan payments, New York Fed says
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A record 7 million Americans are at least 90 days behind on payments for automobile loans, the highest number in history according to a study released Tuesday by the Federal Reserve Bank of New York.

Economists found that the total value of automobile loans in the U.S. climbed by $9 billion in the last quarter of fiscal year 2018.

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"In fact, 2018 marked the highest level in the nineteen-year history of the loan origination data, with $584 billion in new auto loans and leases appearing on credit reports, up in nominal terms from 2017’s $569 billion," economists wrote in a blog post accompanying the study.

According to the report, there are more people now with delinquent or late loan payments, called "troubled borrowers" than there were at the height of the 2008 financial crisis, something economists warn is a red flag.

“The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market,” the blog post continued.

Michael Taiano, a senior director at major credit agency Fitch Ratings, told The Washington Post that car loans often represent the highest-priority large-scale buys for consumers.

“Your car loan is your No. 1 priority in terms of payment,” Taiano told the Post. “If you don’t have a car, you can’t get back and forth to work in a lot of areas of the country. A car is usually a higher-priority payment than a home mortgage or rent.”

Economists, according to the Post, are concerned that the rate of auto loan borrowers who are behind on their payments has continued to rise since 2016, despite falling unemployment numbers.

The total auto loan market is valued at around $1 trillion, while the U.S. housing mortgage industry is valued at around $9 trillion.