[00:00] It's official, guys. Americans are falling behind on their car payments, and it's a lot worse than you probably thought. Since the pandemic, sticker prices have surged across the auto market. Meanwhile, the incentives to buy vehicles have largely dried up.
[00:15] For example, the federal EV tax credit ended on September 30th. Here's what happened. People are buying cars that they truly cannot afford by taking out longer loans. So instead of a standard 60-month term, it's now common to see a 72 or 84-month term.
[00:30] And according to WSJ reporting, subprime auto loans 60 days or more overdue hit a record of over 6% this year. And an estimated 1.73 million vehicles were repossessed last year, the most since 2009, which should sound the alarm.
[00:48] To make matters worse, Tricolor Holdings, a subprime auto lender, filed for bankruptcy last month. Average car payments are now about $750 a month, with a ton of them being over $1,000 a month.
[01:01] And keep in mind, this is for some of the longest terms that we have seen historically. It's not just five years anymore. People are now commonly paying this for six to seven years. But let me know what you think about this in the comments.