RALEIGHCN , August 2, 2022 /PRNewswire/ — Auto loan default rates are at an all-time high, especially for Gen Z and Millennials. Are you at risk of defaulting on your loan? Are there steps you can take to avoid payment defaults? Automoblog’s news article has answers for you.
The consequences of defaulting on your loan can be serious and affect your financial future, from negative effects on your credit score to repossessing your vehicle. Especially as a young car owner struggling to make monthly payments, it helps to know the steps you can take to avoid these repercussions.
Gen Z and Millennials are feeling the brunt of current inflation, which is one of the contributing factors to their rising default rates. Younger generations have experienced some of the highest inflation rates in 2021 compared to older generations.
In today’s environment, many people find it difficult to meet their financial obligations. However, auto loan default rates for young adults in particular have increased significantly over the past two years. Current Gen Z auto loan default rates are 0.46% higher than they were pre-pandemic, while millennial rates show an even bigger increase of 0.48% .
On top of that, vehicle costs have also increased. The average cost of a new car reaches $47,148 in May 2022. Automoblog explains that “record prices for new vehicles make buying a car an even greater challenge, now requiring 40.6 weeks of income on average, or almost the equivalent of a year’s salary”.
With all the financial challenges they face today, young borrowers can find information on the consequences of defaulting on their car loan and tips on how to avoid it in this article.
For more information on the auto loan industry, you can visit Automoblog here.
Automoblog is an automotive news site dedicated to providing drivers and car enthusiasts with the latest automotive industry information and tips.