Might the latest data on car loans to be specific delinquencies on those car loans offer flashing warning signs on credit and the consumer in general As has been reported there are more Americans who are at least three months delinquent on auto loans than has been seen across several decades in fact ever since the Federal Reserve Bank has been recording such data The tally now stands at more than seven million a number that stands as the highest figure estimated by the Fed Separately and expressed as a percentage of total debt taken out the delinquency is the highest seen in roughly seven years and about one million more than had been seen in 2010 The delinquency rate has seemingly been concentrated among borrowers with poor credit as it stood at 82 percent for those with credit scores below 620 at the origination of the loan up from 55 percent at the end of 2012 At the peak of the financial crisis that percentage stood at 94 percent For borrowers at origination who had subprime scores between 620-659 the latest reading was 29 percent where the peak was 36 percent The deterioration among those with weaker credit stands in stark contrast to the upper echelons of debt holders as measured by credit scored and where delinquency rates are only a few tens of basis points Much has been made about the more than 1 trillion in credit card debt that is held by US consumers But auto loans also have a place among the liabilities and seemingly increasingly heavy burdens shouldered by households when it comes to vehicle loans at 12 trillion Originations last year were 584 billion up 26 percent from 2017 This of course signals an appetite for debt that has remained unabated and an appetite by banks and other lenders to extend those loans With growth in auto loan participation there are now more subprime auto loan borrowers than ever and thus a larger group of borrowers at high risk of delinquency the Fed said All in all 24 percent of auto loans are in seriously delinquent status up from 15 percent in 2012 All of this comes amid record-low unemployment numbers and rising wages which seemingly are not enough for households to juggle and handle the debt loads they have taken on and which can and often does extend across credit cards car loans and student loans Vehicle prices and the cost of financing those vehicles has also been on the rise as the average price has been roughly 36 000 up 3 percent from last year according to the Kelly Blue Book which outpaces wage growth If the employment picture is about as tight as it can be inflation is set to rise albeit slowly and the flashing signs indicate that this stage is as good as it gets and it kind of doesnt look all that good Upcoming Live PYMNTS Digital Discussion Join Karen Webster and Kevin Lee on Tuesday February 12 2019 at 1 00 PM EST to learn the best practices on how to transform your Fraud team into a Trust and Safety organization that is built to thrive and enable your company to achieve mission critical goals for 2019 and beyond auto loans car loans credit card debt defaults delinquency economy federal reserve News unemployment