CINCINNATI, OH (FOX19) - A record 7 million Americans are three months behind on their car payments and local dealerships are feeling the impact.
Norwood car dealership A2Z Auto Sales reports that nearly half of its customers are past-due on their payments.
“Every day is challenging when you own a small business. It literally is critical that our customers pay their car payments on time,” said Bobbi Lewis, co-owner of the dealership.
According to the Federal Reserve Bank of New York, 7 million Americans are 90 days or more behind on their car payments.
“When one hears they’re qualified or approved for a loan they think they can afford that loan -- that may not be the case,” said Lewis.
The New York Fed said there were more than 1 million more “troubled borrowers” at the end of 2018 than there were in 2010 when unemployment hit 10 percent and the auto loan delinquency rate peaked. Currently, unemployment is 4 percent, but millions cannot make their auto loan.
Lewis and her husband have been in business for 32 years. Both say the number of customers that are late on payments has never been this high.
“When they don’t pay their bills, we can’t pay our bills,” said Lewis.
FOX19 reached out to five vehicle repossession companies that all report an increase in business. One repo-man, J.R. Agee, says he repos anywhere from eight to 10 vehicles a day, seven days a week.
“That’s abnormal. The economy is so bad that people can get a loan from their bank to buy the car but when it comes to making the car payment they don’t have it,” he said.
The Federal Reserve Bank also reports that people are taking out auto loans at record levels. The data points to predatory lenders pushing loans on vulnerable people with more debt than they can afford.
“It puts them in a position where they bite off more than they can chew,” said Lewis.