Auto Loan Debt Archives - Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

Upside-Down Car Loans Reach All-Time High

Posted on November 9, 2025by Admin

Nearly 1 in 4 vehicle trade-ins toward new car purchases with negative equity carry more than $10,000 in debt, according to Edmunds. The 2025 Q3 data from the online resource for automotive inventory and information, show a growing number of owners are trading in vehicles worth less than what they owe, and the debt they are rolling over is growing.

The latest data reveals:

More than one in four new vehicle trade-ins are underwater, a four-year high.
Americans with upside-down car loans owe more than ever.
Nearly one in three underwater car owners owe between $5,000 and $10,000 in debt — a new record high.
A record share of underwater car loans are carrying five-figure debt.

Rolling over debt drives higher monthly payments. To highlight the financial effect of rolling negative equity into a new vehicle purchase, Edmunds analysts compared the costs for consumers who financed a new vehicle involving a trade-in with negative equity in Q3 against the industry average for all financed new vehicles. The average monthly payment for buyers who rolled negative equity into a new loan was $907 in Q3, down slightly from Q2’s high of $915 and $140 more than the overall industry average monthly payment of $767.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm; we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Auto Loan Debt

Subprime Borrowers Face Record Number of Car Loan Defaults

Posted on October 23, 2025by Admin

A significant group of Americans are falling behind on their car loan payments.

The percentage of subprime borrowers – those with credit scores below 670 – who are at least 60 days late on their car loans has doubled since 2021 to 6.43%, according to Fitch Ratings.

Cars are being repossessed at the highest rate since the Great Recession of 2008 and 2009.

Experts believe this is an economic warning sign of things to come.

Car loans are often the last payment Americans are willing to miss. Cars are simply too important to their livelihood. Cars are essential for most people to get to work, drive their families, and access food.

Many subprime borrowers have no choice but to default. They are unable to sell their car because they owe more than it’s worth. They oftentimes have already missed payments on other financial obligations, such as mortgage or rent, as well as payments due on credit cards and student loans.

The repo business has been busy. Subprime lenders have built GPS features into cars to make it easier for teams repossessing the vehicles to find them. Lenders can even disable the ignition of the cars to prevent owners from driving them once they’ve defaulted on the loan.

Filing for bankruptcy can stop repossession of your car and offer options to keep it or surrender it. An automatic stay goes into effect the moment you file, which legally prevents creditors from repossessing your car, property, and other assets. The best course of action depends on your financial circumstance and whether you can realistically afford to keep the vehicle.

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Federal Reserve Cut and What It Means for Mortgages, Credit Cards, Car Loans

Posted on October 7, 2025by Admin

The Federal Reserve cut its standard interest rate for the first time in nine months. Since the last cut, Americans are dealing with more inflation and a challenging job market.

The federal funds rate, set by the Federal Reserve, is the rate at which banks borrow and lend to one another. While the rates that consumers pay to borrow money are not directly linked to this rate, shifts in Fed policy affect what people pay for credit cards, auto loans, mortgages, and other financial products.

The Fed projected it will cut rates two more times before the end of this year.

Mortgages will be affected gradually.

For prospective homebuyers, the market has already priced in the rate cut, which means it is “unlikely to make a noticeable difference for most consumers at the time of the announcement,” according to Bankrate financial analyst Stephen Kates. It is anticipated that the declining interest rate environment will provide relief for borrowers over time.

Auto loans are not expected to decline soon.

Americans have faced steeper auto loan rates since early 2022, which are not expected to decline anytime soon. Prices for new cars have leveled off recently, but remain at historically high levels, not adjusting for inflation. An auto loan annual percentage rate can run from about 4% to 30%. Bankrate’s most recent weekly survey found that average auto loan interest rates are currently at 7.19% on a 60-month new car loan.

Credit card rate relief could be slow.

Interest rates for credit cards are currently at an average of 20.13%, and the Fed’s rate cut may be slow to be felt by anyone carrying a large amount of credit card debt. The best thing for anyone carrying a large credit card balance is to prioritize paying down high-interest-rate debt, and to seek to transfer any amounts possible to lower APR cards or negotiate directly with credit card companies for accommodation.

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Auto Loan Debt, Consumer Debt

Auto Loan Debt Rising in the U.S. – Here are Cities with the Most

Posted on June 3, 2025by Admin

People in the U.S. collectively owe over $1.64 trillion in auto loan debt, with the average household owing nearly $14,000. These loans have become significantly more expensive, and interest rates have surged.

WalletHub has identified the cities where auto loan debt is growing the fastest and those where the increases are more modest by examining proprietary consumer debt data. Here are the findings:

Hialeah ranks in the Top 5 cities where auto loan debt is increasing the most. Miami comes in at #43 on the list. In most of the Top 10 cities on the list, this extra debt is a bad sign because those cities tend to have high debt delinquency rates and a lot of people experiencing financial distress.

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If you have questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.