INCREASING SUBPRIME AUTO LOAN DEFAULTS – THE CANARY IN THE COAL MINE FOR 2023 BANKRUPTCY FILINGS
By: Charles M Tatelbaum and Corey D. Cohen, Tripp Scott PA
Experience tells us that the recent increase in subprime auto loan defaults can be a reliable predictor of an overall increase in consumer bankruptcies which, in turn, causes problems for businesses in many sectors. Recently reported data discloses that in the fourth quarter of 2022, subprime auto loan defaults increased by slightly more than 30%.
These defaults rise from a number of reasons, namely: (1) higher interest rates on the subprime loans that have a floating rate of interest; (2) inflationary increases which have pinched consumers' budgets; and (3) increased costs of rental housing.Read More