Auto strain

As if young people didn’t have enough to worry about, making payments on their automotive loans is increasingly a concern. Over the last two and half years, the balance of outstanding auto loans has accelerated in the US, particularly for younger consumers. Between 2Q20 and 4Q22, auto loans among those aged 18 to 29 grew 31% versus those aged 40 to 49 at 23%. Although most of these loans were extended before interest rates began to rise, inflationary pressure on budgets has contributed to rising delinquency rates. While these have consistently been higher among younger consumers anyway, that trend accelerated over the last year. With student loan payment deferment programs scheduled to expire later this year, many younger consumers feel added pressure to realign budget priorities.