The subprime auto market looks very tough in 2021

The subprime auto market appears to be in poor health as the number of borrowers with loans over 60 days past due continues to rise. While this number tends to rise and fall between seasons, the general debt trend has been increasing since 2015, with more and more customers with poor credit scores becoming unable to pay their freight bill.
Crime has skyrocketed in 2020, as government lockdowns have pushed many people out of work and now appear to be on the rise due to a stimulus package that appears to primarily serve cooperative interests and the wealthier socio-economic classes. While it must be said that middle and lower class families have been losing ground for decades, at least according to the latest data from Pew Research. Complications from the pandemic have only accelerated existing financial disparities on all fronts. We are now on the right track to ensure that the poorest have even less money in the future, especially in the most developed countries of the world.
I wonder why so many people fail to pay off their car loan …
the the Wall Street newspaper provided concrete figures regarding the increase in the number of defaults in the United States this month and presented the problem as resulting from “an uneven economic recovery and a deep divergence between those who can navigate the coronavirus slowdown and those who cannot. “
Unfortunately, those who cannot have their vehicle repossessed because they are experiencing another problem with their already low credit score.
Of WSJ:
A greater proportion of people with low credit scores have fallen behind on their car payments in recent months, a sign of stress among consumers whose finances have been hit hard by the pandemic.
Some 10.9 [percent] of subprime borrowers with outstanding auto loans or leases were more than 60 days past due in February, up from 10.7% in January and 8.7% [percent] a year ago, according to credit reporting firm TransUnion. This is the sixth consecutive month-over-month increase and the highest level of monthly data dating back to January 2019.
Over 9 [percent] of subprime auto borrowers were over 60 days past due in the fourth quarter, with the highest quarterly figure in 2005.
“We are seeing the separation between consumers who are back on their feet and those who are not,” said Satyan Merchant, head of TransUnion’s auto finance division.
Although breaks were granted to some tenants and business owners, average people tended to benefit the most from deferrals of student loans and federally guaranteed mortgages. the the Wall Street newspaper suggested that this gives a potentially unfair advantage to owners and college graduates, both of whom are likely to have a stronger financial footing than someone who claims neither of the two attributes. Some lenders have also decided to provide temporary help with monthly payments at the start of the pandemic. But that leniency started to evaporate in the middle of 2020, leading to an increase in the number of defaulting clients from last April.
We are now in a situation where the number of subprime borrowers has also declined, with many people losing interest in accumulating debt or unable to be approved for a loan. But those with excellent credit scores seem to be able to make their payments with good historical consistency. This will likely bring little solace to those occupying the old group, however.
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