Seven million people are at least 90 days behind in their car payments, according to a report from the Federal Reserve Bank of New York.



Longer auto loan periods and increased average loan amounts may be another indication that people are overstretched, despite sunny reports about the economy.



Total auto debt in the U.S. today exceeds $1 trillion, the Federal Reserve said.



Think about the impressive number that is $1.3 trillion. That's the total amount of auto-loan debt in the United States today, representing a $584 billion increase over the level in 2010. Break that down consumer by consumer, and it's a bit alarming to learn that, according to a Federal Reserve report, some seven million American consumers are 90 days or more behind on their auto-loan payments and potentially facing repossession.



Analysts are speculating that this could mean we're entering a bust period in the auto industry after years of booming sales and rapidly increasing average monthly payments. We previously reported that auto-loan terms were also being stretched to record lengths.



"Longer loan periods typically result in higher interest being paid over the life of the loan," said Jeremy Lark, senior manager of client services at GreenPath Financial Wellness, a nonprofit credit-counseling agency headquartered in Farmington Hills, Michigan. "This could result in the consumer being 'upside down' on the vehicle, in other words he/she owes more on the loan than the vehicle is worth. Longer loan periods may limit the consumer’s ability to upgrade their vehicle or become problematic if the vehicle breaks down or becomes unreliable."

The consumer lending site Lending Tree reported that the average amount borrowed for a new-car purchase is now $29,921.27, an increase of $5000 over the average from 10 years ago. The average monthly payment is now $530 per month for new vehicles and $381 per month for used vehicles.

"Some lenders can initiate repossession proceedings after a single default on the loan," Lark said. "Consumers should understand the terms of the loan, work with their lenders and seek out any help or assistance available to them."

More troubling is that this uptick in auto-loan delinquencies may mean that the economy isn't as strong as it might look. No matter how many politicians and analysts trumpet low unemployment levels and other positive economic indicators, the high number of auto-loan delinquencies probably means that there are plenty of lower-income consumers still struggling to make ends meet. Of course, there's also a subset of those delinquent borrowers who got themselves in over their heads with loans that were unreasonable.

"If a consumer becomes delinquent on any loan, particularly a loan that is tied to personal transportation, this can be very stressful," Lark said. "For many families, a vehicle is integral to earning and maintaining income. For individuals that find themselves in this situation, they should reach out to an organization like GreenPath to get free, unbiased advice on how to deal with such a difficult situation."

If you or someone you know is at risk of repossession or falling behind on other bills due to financial hardship, talking to a certified credit counselor is free and the first step toward resolution. The National Foundation for Credit Counseling (NFCC) can connect American consumers with local assistance for debt relief; GreenPath Financial Wellness is an accredited member of the NFCC and operates via call centers and field offices to service the entirety of the United States.

This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io