Auto loan delinquencies in the US are on the rise, surpassing pre-pandemic levels, leading to more defaults and repossessions. 2.5 million cars were repossessed in 2024, and 3 million are projected for 2025. Auto loans total over $1.6 trillion, with rising financial strain on households.

Economic indicators suggest a slowdown, with hiring and spending softening since late 2024. The Consumer Federation of America warns of climbing auto loan default rates resembling pre-Great Recession levels. The BLS reports minimal job growth and a 4.3% unemployment rate, pointing towards a potential recession in 2025.

Despite the rise in auto delinquencies, the New York Fed notes steady transitions from short-term to long-term delinquencies. The debt-to-asset ratio for Americans is at a 50-year low, providing some financial cushion. Rising car prices, higher interest rates, and increased insurance costs contribute to affordability challenges for car owners.

To avoid car repossession, don’t buy more car than you can afford. Consider refinancing or seeking hardship programs. If facing repossession, negotiate fees and payment plans with the lender. Keep records of all communications for documentation purposes. Financial responsibility is key in managing car ownership and payments.

Read more at Yahoo Finance: Car repossessions expected to hit their highest rate since the 2009 recession. Is it a sign the economy is in trouble?