Having a car is more of a necessity than a luxury in a lot of places in Pennsylvania. Unfortunately vehicles are expensive, and very few people can afford to purchase one outright. This means the average person has to take out an auto loan when getting a car. As the COVID-19 virus continues to affect the American economy and even put some people out of work, saving the car amid this difficult time could be difficult.
Americans had $1.33 trillion in auto debt during the fourth quarter of 2019. Between the third and fourth quarters, vehicle owners added $16 billion to reach that total. But debt alone is not necessarily the problem. A bigger issue is the number of people who are already delinquent on their auto loans.
Over seven million people were more than 90 days delinquent on their auto loans at the end of 2019. That is actually more than back in 2010, when only six million people were 90 days past due as they came out of the Great Recession. With so many people already struggling to keep up, the predicted economic slowdown will hit car owners hard. Gen Xers might feel this most, as this generation is more likely to have car loans than any other. They also carry the highest auto loan balances, around $19,300.
Many Pennsylvania consumers are being abundantly cautious during this time. However, this means that many people are working fewer hours or even none at all. When faced with this situation and mounting bills and debt, saving the car can be key for maintaining a reliable source of transportation when searching for additional or new work. Filing for bankruptcy can give a person the ability to keep his or her car while also providing a path for financial stability.