Cars may be driving large numbers of American’s into recession At least, that’s what many economists are claiming. 

According to the most recent figures, over 7 million Americans have taken out loans on cars that they could not afford, and subsequently, they have gone into serious delinquency on these loans. 

The Federal Reserve Bank of New York has cautioned that this large amount of delinquent car loans could signify a massive shift in America’s economy. As a result, they have raised interest rates at the US Fed and are warning consumers to carefully consider any purchases along with the burden it may place on their finances. 

In America, many Americans have continued buying cars even while sales have stalled across the globe. Europe, which is suffering from a recession, has had the lowest car sales in recent history. Conversely, although Americans are continuing to purchase new vehicles, many are constantly racking up auto-loan debt which insinuates that they may not be as comfortable with their finances as originally suggested. 

Figures suggest that more and more Americans are becoming unable to pay for the cars that they continue to drive. Among 18-29-year-olds, the ninety-day past-due delinquencies are at the highest level since 2008 during the awful financial recession. However, the delinquency figures are extremely high across nearly ever any group. 

Economists may take the number of car sales at face value and suggest that America’s economy is slowly recovering. Yet, a deeper analysis shows that these purchases are merely indicative of an America in which citizens are unable to afford the possessions they want. 

Industry leaders are warning that there could soon be a slowing down in sales as a variety of factors spread and affect the rate in which consumers purchase cars. For example, the fake-diesel-testing of 2018 has caused many consumers to reject purchasing new diesel models. Plus, with the rise in prevalence of a caution surrounding human’s effects on the earth, many are waiting for more eco-friendly models to be released. Similarly, the popularity of ride-sharing apps like Uber may further encourage Americans to forego purchasing a car. 

All in all, the rate of delinquency among car-owners is startling and is continuing to increase. With this new trend, economists are warning Americans to prepare for the worst and begin tucking away money in case a recession may hit.