The Federal Reserve Bank of New York reported earlier this month that a record number of Americans (7 million) are at least three months or more behind on their car payments. This number is even higher than it was during the financial crisis.
Economists are gravely concerned about this statistic because it shows that even though the economy is strong, and the unemployment rate is low, Americans are still struggling to pay their bills.
Most people typically make their car payment first because they need a vehicle to get to and from work, and, should everything go south, they can live in their car.
Cars are also much easier to repossess, which is why most everyone prioritizes making that payment in lieu of a mortgage payment or rent. People more than three months behind in their car payments often lose their cars.
Of the Americans behind on their bills, most of them are under age 30 and have low credit scores. This plight underscores the long-held suspicion that young people are having trouble paying for their student loans and anything else at the same time.