auto loan defaults 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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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.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Auto Loans & Default Rates on the Rise

Posted on May 26, 2017by Admin

According to data released this week by the Federal Reserve Bank of New York a record 107 million Americans have auto loan debt. That accounts for approximately 43% of the adult population in the U.S.

Auto loans have been increasing rapidly. In early 2012, only 80 million Americans had car loans. But now more Americans have auto loans than home loans- and according to recent numbers, many are having trouble affording their monthly payments. There are currently 6 million people who are 90 days or more behind on their car payments.

After the financial crisis, so-called “sub-prime” auto loans were routinely given to borrowers with less than perfect credit. Low quality loans spiked to pre-crisis levels in 2015 and 2016, according to federal data.

Many of the consumers qualifying for these loans do not understand the terms and conditions. The interest rates can be astronomical- sometimes as high as 20% and penalties for default can be severe.

Santander Consumer USA Holdings Inc., which is counted among the biggest subprime auto-loan firms, verified income on just 8% of borrowers. Limited verification of loan applicants’ stated incomes and employment “creates more uncertainty around whether borrowers will be able to afford their monthly payments, which becomes particularly important if they have poor credit records and risky loan terms,” the analysts wrote.

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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all 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, P.A. 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 website at www.miamibankruptcy.com.