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Wealthy Buyers Dominate Auto Sales As K-Shaped Economy Emerges
Benzinga
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2 days ago
Average new car prices hit a record $50,080 as loan rates near 9%, widening inequality in the auto market. Wealthier buyers dominate new sales while subprime borrowers face record delinquencies and soaring default risks.
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00:00
It's Benzinga, bringing Wall Street to Main Street.
00:02
U.S. consumers face widening inequality in the auto market as average new car prices
00:06
topped $50,000 for the first time last month, according to CNBC.
00:11
Moalthier households with access to capital and favorable loan rates are fueling new car sales,
00:15
while budget-conscious buyers are retreating to the used market or avoiding purchases.
00:19
Average new auto loan rates reached about 9% in August,
00:22
with subprime borrowers facing much higher rates of 18% to 20% and greater default risks.
00:28
Record new high car prices of $50,080 coincide with rising delinquencies, defaults, and repossessions,
00:34
especially among subprime borrowers, with FICO scores below 620.
00:38
Fitch ratings said 6.43% of subprime auto loans were 16 days overdue in August, near record highs.
00:45
Economists warn this trend reflects a K-shaped economy,
00:47
where the rich gain from stock and housing growth,
00:49
while lowering consumers struggle with debt and inflation.
00:52
For all things money, visit Benzinga.com.
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