Bank: Auto loan delinquencies in U.S. at highest point since 2010

Borrowers are behind in their auto loan payments in numbers not seen since delinquencies peaked at the end of 2010, according to the Federal Reserve Bank of New York.

More than 7 million Americans were 90 or more days behind on their car loans at the end of last year, 1 million more than eight years ago, according to a report from the bank. That’s a potential sign of trouble for the auto industry and perhaps the broader economy.

The New York Fed reported that auto loan delinquency rates slowly have been worsening, even though borrowers with prime credit make up an increasing percentage of the loans. The 90-day delinquency rate at the end of 2018 was 2.4 percent, up from a low of 1.5 percent in 2012, the bank reported. Also, delinquencies by people under 30 are rising sharply, the report said.

But economists and auto industry analysts say they aren’t sounding an alarm yet. The number is higher largely because there are far more auto loans out there as sales grew since the financial crisis, peaking at 17.5 million in 2016. The $584 billion borrowed to buy new autos last year was the highest in the 19-year history of loan and lease origination data, according to the report.

Other signs still point to a strong economy and auto sales that will continue to hover just under 17 million per year for the near term.