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Nearly 43 percent of adults in the United States — a whopping 107 million Americans — are shouldering auto loan debt.
That’s according to new data from the Federal Reserve Bank of New York, which also found that car loan balances swelled by $10 billion in the first quarter of 2017.
The auto loan situation in the U.S. looks a lot different today than it did five years ago. CNN Money says:
In early 2012, only 80 million Americans had car loans. In fact, more Americans had home mortgages than auto loans in 2012. But all that has changed. Today the number of auto loans far outpaces home loans.
But with a growing number of delinquent car loan borrowers, the “easy-to-get” car loan trend is not expected to continue for much longer. Many lenders are now tightening their belts and making it more difficult for subprime borrowers to get approved for a car loan, Bloomberg reports.
Are you in the market for a new car? Auto loans are the third biggest source of household debt for Americans, behind mortgages and student loans.
If you fail to negotiate a good deal on a loan, it can end up costing you big bucks, according to “Don’t Take Out a Car Loan Before Reading This.”
For example, you don’t want to end up upside down on a car loan. As Nancy Dunham writes in “3 Ways Car Loans Can Go Wrong — and How to Avoid Them,” here are three ways you can reduce your odds of getting upside down:
- Make a down payment of at least 20 percent.
- Finance a car for no more than four years.
- Don’t let your monthly vehicle expense — including principal, interest and insurance — exceed 10 percent of your gross income.
For more tips on getting a good deal on an auto loan, check out:
Do you have a car loan? Share your experiences or tips below or on Facebook.