Auto sales, though still flirting with the possibility of another annual record, have begun to level off as consumers satisfy much of the pent-up demand that swelled during the recession. Another sign the market may be reaching its peak: more Americans are falling behind on their car payments.
As U.S. sales growth slows in 2016, summer demand is falling short of last year’s blockbuster numbers. Industry-wide sales ticked 0.7% higher in July compared to the same month a year ago, according to Autodata. In July 2015, automakers reported a 5.3% increase in deliveries. General Motors (GM), Ford (F) and their fellow manufacturers will release August sales results on Thursday.
The slowing pace of sales has come at a time when loan delinquencies are on the rise in the $1 trillion auto-loan market. For subprime auto loans, delinquencies extending beyond 60 days jumped 17% last month, Fitch Ratings said in a recent reportOpens a New Window.. The upswing is more pronounced for prime delinquencies, which were up 21% versus July 2015.