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Rising Delinquency Rates Put Outstanding Car Loans Over $1 Trillion

Mike Blake—Reuters Automobiles are shown for sale at a car dealership in Carlsbad, California, on May 2, 2016.

More Americans are leasing cars, at higher rates

Americans are borrowing more than ever to pay for their vehicles, with many consumers behind on their payments.

Outstanding auto loans totaled $1.027 trillion between April 1 and June 30, according to a report by USA Today. The automotive division of one of the nation’s largest lenders, Experian Automotive, says that this is the second consecutive quarter over $1 trillion.

Leases are up, accounting for 31.44% of all new car and truck buys in the second quarter, compared to 26.9% a year ago. Average monthly payments for these loans are also higher, at about $499, compared to $483 last year.

Overdue payments are on the rise as well, with 30- and 60-day loan delinquencies up 17% from a year ago among subprime and deep subprime borrowers—or those with a credit score of less than 600.

The auto market could see the full impact of an increased number of leases in a few years, when more of the leased vehicles are returned, causing the prices of those cars to drop at auction.

[USA Today]

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