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Car buyers are bracing for tougher times as debt burdens climb
Q1 saw a rare decline in auto loan balances. (2 min. read)

Americans now owe $1.64 trillion in auto loans, down $13 billion in Q1—the second quarterly decline since 2011, according to new data from the New York Fed.
Why it matters: Consumers are increasingly pessimistic about their financial futures, and it’s changing how they approach debt, big-ticket purchases, and auto financing in particular.
Consumers expect income growth to drop to 2.6%, the lowest since April 2021.
More households now say they’re worse off than a year ago, and even more expect to be worse off next year.
Driving the news: In February, a record 34% of consumers who wanted an auto loan reported that they didn’t apply because they assumed they’d be rejected.
That’s the highest share since the Fed began asking the question in 2014.
14% of those who did apply said they were denied, up from just 1.5% in October 2014.
And the total share of “discouraged borrowers” across all credit types hit 8.5%, another record.
The big picture: This retreat is happening as consumer finances grow more strained...
Student loan balances rose by $16 billion—and delinquencies are surging after being artificially deflated for years.
Credit card balances fell slightly in Q1, but remain 6% higher year-over-year.
And mortgage delinquencies are rising again for the first time in several quarters.
The result: Consumers are responding by tightening their own personal credit filters.
What to watch: Whether rising debt payments in other categories start pushing auto loan delinquencies higher. So far they've remained stable, but with household budgets increasingly strained, that could change quickly. Add potential auto tariffs to the mix, and higher prices could exacerbate wavering consumer confidence.
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