(ZEROHEDGE) – Automobile affordability worsens as Americans are saddled up with monthly payments topping $1,000, and loan delinquencies are creeping higher thanks to increasing economic pressures thanks to the Federal Reserve’s aggressive monetary tightening regime to rein in the highest inflation in 40 years. A Fed-induced downturn in the economy could end up bursting the auto bubble.
“We are seeing delinquencies start to increase,” Ford Chief Financial Officer John Lawler told the Deutsche Bank 2022 Global Automotive Conference last month. “We’re looking for every indication and every data point we can to get a read on where the consumer is, where they’re headed given everything that we see out there, the inflationary pressures, the economic issues, et cetera. So we are seeing some headwinds there a little bit when it comes to delinquencies as maybe a leading indicator.”
Edmunds’ executive director of insights Jessica Caldwell also noted, “auto loan delinquencies are expected to rise,” adding consumers must “understand the risks associated with financing more than what they can afford.”
