NEW YORK (sbup) — Maybe some of us shouldn't have bought new cars.
Manufacturers and dealers are popping champagne over the latest vehicle sales numbers. According to J.D. Power and LMC Automotive, new-vehicle sales in November should be at their highest levels since 2001 — that's 5.5% higher than a year ago, with 13.5 million new cars, trucks and SUV's being driven off dealer lots. Early holiday sales will contribute to robust growth, experts say.
"The industry continues to demonstrate strong sales growth, which is exceptional considering that November is currently on pace to record the highest average customer-facing transaction prices ever," says John Humphrey, senior vice president of the global automotive practice at J.D. Power. The Thanksgiving weekend helps, having become the highest-volume holiday weekend of the year.
Overall, Americans were on track to spend $33.3 billion on new vehicles in November, up $1.1 billion from a year earlier. The average total cost of a new car or truck is $30,874, J.D. Power says.
But perhaps all that spending is getting to be a burden. More and more Americans are falling behind on car payments.
TransUnion, the Chicago credit reporting giant, says auto loan delinquency rates have climbed by 13% this year and total auto loan debt, on average, has risen to $17,352.
The demographic with the biggest hike in auto debt are consumers 30 or younger, who have experienced an 18% rise in auto loan debt, TransUnion says.
It could be worse. "The auto loan delinquency rate is rising, but it remains well below levels observed just a few years ago," says Peter Turek, automotive vice president at TransUnion. "With nearly 5 million more auto loan accounts reported in the last year and with continued sales strength in this sector, it's not unusual to see an increase in the delinquency rate. As long as delinquency rates remain around 1%, we don't anticipate seeing a material change in auto lending strategies."
If you do fall behind on auto loan debt, don't ignore it. Contact your auto lender right away and let them know you're having financial trouble. Most lenders will work with you, and even suspend payments for a few months (although expect the interest meter to keep running) to give you time to catch up.
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