(Reuters) – A study on loans for buying automobiles in the United States has found that weaker consumer budgets are negatively impacting loan payments for some borrowers, credit reporting agency TransUnion said on Thursday.
WHY IT’S IMPORTANT
U.S. consumers are continuing to hold back on big-ticket purchases and being careful with their spending amid inflationary pressures and the Federal Reserve’s monetary policy path.
The TransUnion study showed continued declines in auto-loan applications since the pandemic.
Despite the recent recovery in supply chain shortages, elevated inflation and higher interest rates that followed have put consumers in a tight financial bind, according to the study.
BY THE NUMBERS
TransUnion said first-quarter auto delinquencies that are 60 days or more past due date have risen to 1.33% from 1.19% a year earlier.
WHAT’S NEXT
Many borrowers have been taking on additional monthly payments to compensate for higher debt levels due to budget constraints, and some are further holding off on new auto leases and purchases, according to the study.
Increased pressures on consumer affordability and spending will further drive a slowdown in an already sluggish auto origination market, TransUnion said.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Mohammed Safi Shamsi)
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