The Economic Perspective: “The Condition of Vehicle Buying”

Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at the condition of vehicle buying.  Mike, for many households, owning and operating vehicles takes the second largest bite from their income, behind only shelter.  Many households also borrow to buy their vehicles.  So with the importance of vehicles to household finances, bring us up-to-date on the current status of vehicle finances.

 

Mike:  Summary Answer

  • First, vehicles have gotten more expenses, causing many buyers borrowing to purchase extending their payment period – to average of 66 months, up from 55 months 20 years ago
  • Auto debt is only behind mortgage and student loan debt in size
  • Delinquencies on auto debt have crept up slightly, but credit scores of borrowers is still high
  • Still, lenders have recently tightened their lending standards
  • Bottom line – no glaring problem now in vehicle financing, but bears watching
  • I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics