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Car Repossessions Surge 23% as Americans Fall Behind on Payments (www.bloomberg.com)

submitted 3 months ago by return2ozma@lemmy.world to c/personalfinance@lemmy.ml

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[–] davel@lemmy.ml -1 points 3 months ago (1 children)

The Fed raising rates only affects recent car buyers, so it can’t account for a 23% surge. What the Fed raising rates does do—and is intended to do—is cause unemployment, which inevitably results in missed car payments, and even missed mortgage payments.

[–] protist@mander.xyz 4 points 3 months ago* (last edited 3 months ago) (1 children)

so it can’t account for a 23% surge.

Why not? I don't see this logic

The Fed raising interest rates affects lots of things directly, including the cost of home and auto loans, not just unemployment rates, which are indirectly affected

[–] sugar_in_your_tea@sh.itjust.works 4 points 3 months ago* (last edited 3 months ago)

Exactly. Auto loans are relatively short-term, and you're probably more likely to default relatively early into the loan than later, esp. since you would no longer be upside-down later on.