Car Loan defaults

Higher car prices and rising interest rates are hindering car owners’ ability to afford their vehicle payments, as 6.1% of subprime auto borrowers are at least 60 days past due on their loans, the highest percentage in data dating back to 1994


And yet, the auto industry sees it’s path to nirvana, riding on the biggest, most expensive, vehicles it can build, enabled by ever longer financing periods.


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GM did just bring out the Trax, starting at a bit over $20k

2024 Chevy Trax | Compact SUV | Affordable Crossover (

Not bad looking. Made in Korea.

Which wasn’t a terrible strategy when interest rates were ridiculously low. Now that rates are higher than they’ve been since…I guess since the Great Recession? Maybe we will see a little bit more interest in more affordable models. Nothing that’s going to undo a decades-long shift towards larger cars, of course - but maybe the <$30K market might see some more growth going forward.

It may get “interesting”. Ford, and VW, in particular, have promised Wall St ever higher ATP and GP, and, they say, they don’t care about market share.


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Well, they could always walk that back a bit. If car finance rates stay high, and consumers just can’t afford the same ATP as they did before, it might be hard for them to pursue that strategy - or at least not as purely as they might have liked. That’s not going to drag Ford back into making compact sedans right away (or ever), but maybe they keep the Escape around a little longer. Especially if higher rates slow electrification.

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The people who can afford it are putting down larger down payments on houses than anything we have ever seen…nominally.

I think there are more halves than ever in this country. But the have-nots have fallen dramatically behind without fiscal aid.

The rich still are seeing directly or indirectly the benefits of government spending.

That was the plan when Japan started eating their lunch in the 70’s, too, and when it became clear that “lunch” wasn’t enough for them they belatedly responded with such winning entries as, uh, the Pinto, Gremlin, and Vega.

So, you know, success!


American auto executives have a long history of betrayal.

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That was their plan in the late 50s. Not only did the Rambler work it’s way up to the third best selling brand in the US, Studebaker got a stay of execution with the Lark, before the big three could respond with their own compacts.

The big three got clobbered again in the early 80s. Mr Free Enterprise in the White House twisted the arm of the Japanese to limit their exports to the US for several years, while the big three rushed new subcompacts into production.