Surging auto loans help fuel rise in American household debt
The auto loan has flourished among American consumers over the last two decades, with its prevalence among the U.S. population rising each of the last seven years, the Federal Reserve Bank of New York said Tuesday.
The portion of Americans with a car loan climbed to 35% last year from just 20% in 1999, the New York Fed said in a blog post accompanying its quarterly report on household debt and credit. Auto loans first overtook mortgages in 2013 and have pulled further ahead every year since.
The longer-term backdrop helps explain why the New York Fed has been cautious about the quality of auto debt deteriorating. The regional bank flagged in February that more Americans than ever were at least three months behind on their auto loans and said delinquencies were worsening among subprime borrowers.
Auto debt continued to expand in the first quarter, ticking up to $1.28 trillion from $1.23 trillion a year ago, the New York Fed said in its latest report. The percentage of car loans more than 90 days late rose to 2.36% in the first quarter, up from 2.29% a year ago and in line with the fourth quarter of 2018.