Auto Debt Is Stressing Us Out

According to the New York Federal Reserve, more than 7 million Americans were 90 or more days behind on their auto loan payments at the end of 2018.

A new survey from Car-as-a-Service provider Fair showed that auto loans are a source of emotional stress and anxiety for many Americans.

The results also show that Americans would be willing to give up many simple pleasures for life—even social media and coffee—to never have another auto loan payment again.  

The perceived stress of auto loans is especially prevalent among Millennials (ages 18-34).

These younger consumers are more likely than their older counterparts to have negative perceptions about auto loans and to believe that auto loans have harmful impacts upon their well-being.

“In an era of cord-cutting and a consumer culture that increasingly values experiences over assets, taking out a five- or six-year loan to get a car has never made less sense,” said Ed Brojerdi, Global Head of Brand for Fair. “This survey sheds light on why we at Fair are committed to eradicating auto debt with a totally new way to get an affordable pre-owned car that prioritizes flexibility, freedom and fairness.”

Key findings of the Impact of Auto Debt in America survey include:

  • Auto loans are a stress factor in many people’s lives and have caused negative impacts in various areas—including personal finances, mental and emotional health, and romantic and sexual relationships:
  • Over 2 in 5 vehicle owners (42%) say auto loans have caused them to experience stress.
  • 36% of Americans believe that having auto loan debt is more stressful than finding a new job.
  • Nearly 1 in 3 vehicle owners (28%) say buying a brand-new vehicle is one of their biggest financial regrets.
  • Nearly one quarter of those who’ve had auto loan debt (22%) say having auto loan debt has negatively impacted their mental/emotional health.
  • 12% of those who’ve had auto loan debt say that debt has negatively impacted their romantic relationships/sex life.
  • Nearly half (47%) of Americans who have had auto loan debt say it has taken away some of their peace of mind.
  • More than 1 in 10 Americans (13%) get anxiety just thinking about paying auto loans.

The stresses of auto loans are especially intense for Millennials (ages 18-34):

  • Millennials are more than twice as likely as those ages 35+ to get anxiety just thinking about paying auto loans (22% vs. 9%).
  • Nearly half of Millennials who have purchased a vehicle (49%) say auto loans have caused them stress (vs. 35% of vehicle buyers ages 55+).
  • Millennial auto loan debtors are more than 4 times as likely as those ages 35+ to say having auto loan debt had negative impacts on their romantic relationships/sex life (28% vs. 6%).
  • Millennials who’ve had an auto loan are about twice as likely as those ages 35+ to say they felt regretful immediately after signing their auto loan (19% vs. 8%).

Americans are prepared to make some surprising trade-offs to avoid auto debt, and many even find it more painful than going to work naked:

  • More than half of Americans who’ve had auto loan debt (52%) say it has caused them to make sacrifices when it comes to vacations and travel plans.
  • 3 in 10 Americans (30%) would give up social media for life if it meant they never had to make another auto loan payment again.
  • 24% would give up coffee, and 22% would give up streaming services for life in exchange for never having to pay off an auto loan again.

Over a third of Americans (34%) think going to work naked for a day would be less painful than having monthly auto loan payments for 5 years. Nearly half of Millennials (47%) think going to work naked for a day is less painful than 5 years of monthly auto loan payments, compared to 22% of those ages 45+.

Your Credit Union Can Help

While services like Fair provide one way to get around the stress, not everyone is right for these new services. Some of us still need to own or lease a vehicle. Thankfully, there are credit unions to help take the stress out of conventional auto finance.

Credit unions are not-for-profit and member-owned. That means they are the ultimate in consumer-friendly financial organizations. You’ll find some of the best deals on new and used vehicle financing at your local credit union.

You can also find ways to cut down on your existing vehicle payment through a refinancing. Your local CU can show you how moving to a lower interest loan can really save you money each month.

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