Millions of Americans are stuck in auto-loan debt. AP Photo/Charlie Neibergall

A new report from the Federal Reserve Bank of New York revealed 7 million Americans are behind on their auto payments by at least 90 days.

Most of the Americans who have recently fallen behind on their car payments have low credit scores or are younger than 30 years old.

Fed economists said the rise in the number of delinquent borrowers is "surprising" considering a strong labor market and economy.

Also read: The shock surge in US car-loan delinquencies gives a clue why the Fed is treading carefully even in a booming economy

Millions of Americans are struggling with their car payments, and even economists are surprised.

According to a new report from the Federal Reserve Bank of New York, more than 7 million Americans have reached serious delinquency status on their auto loans, meaning they're at least 90 days behind on payments.

Fed economists said this is "surprising" considering a strengthening labor market and economy.

People often prioritize car loans because many need to drive to get to work and earn a paycheck, The Washington Post's Heather Long reported. The fact that a record number of Americans aren't making those payments is "usually a sign of significant duress among low-income and working-class Americans," Long wrote.

"The substantial and growing number of distressed borrowers suggests that not all Americans have benefitted from the strong labor market and warrants continued monitoring and analysis of this sector," Fed economists wrote in a blog post dissecting the report.

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The data show that most of the borrowers whose auto loans have recently moved into delinquency are people younger than 30 years old and people with low credit scores. Eight percent of borrowers with credit scores below 620 - otherwise known as subprime - went from good standing to delinquent on their auto loans in the fourth quarter of 2018.

And the data show that most delinquencies come from auto-finance lenders, rather than banks and credit unions.

The Fed found that half of outstanding loans from auto-finance companies are made to subprime borrowers, and 6.5% of those loans are more than 90 days overdue. That's compared with just 14% of outstanding loans from credit unions made to subprime borrowers, 0.7% of which are delinquent.

The delinquency figure represents a new high in the auto-loan market - more than 1 million more people are behind on auto-loan payments now than at the end of 2010. More people have auto loans now than in 2010, so while the overall rate of delinquency is down, the total number of people who have fallen at least 90 days behind their payments is higher.

Read more: American household debt just hit a new record high

The Fed has been tracking the auto-loan industry for more than five years, the economists said in the blog post, and it's not the first time the group has sounded the alarm. In 2017, a quarterly report from the Fed highlighted the near doubling of the rate of delinquencies in subprime auto loans originated by auto-finance companies since 2011, Business Insider's Matt Turner reported.

Turner also reported at the time that Wall Street was expressing concern over the subprime-auto-loan market as well. Meanwhile, Business Insider's Lauren Lyons Cole reported that Americans borrowed more money to buy cars than to attend college between 2016 and 2017.

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