Rising Car Loan Delinquencies Signal Economic Strain Amid Government Shutdown Fears

Car loan delinquencies in the U.S. have surged to their highest level since 2009, with a 51.5% increase over the past 15 years, reflecting growing financial struggles among consumers. In 2024, around 1.73 million vehicles were repossessed, marking a peak not seen since the financial crisis, according to data highlighted in the Daily Gazette. Nearly 14% of new car buyers in September 2025 had credit scores below 650, the highest percentage since 2016, indicating increased risk among borrowers. Economists are divided on whether these rising delinquencies point to a broader economic downturn or result primarily from relaxed credit practices. Kelly Cunningham from the San Diego Economic Research Institute stresses that escalating consumer debt and persistent inflation present significant risks, particularly for low-income workers who depend heavily on vehicles for their livelihoods. Contrarily, David Ely of San Diego State University notes that despite some financial stress at the household level, the economy as a whole experienced a robust GDP growth of 3.8% in the second quarter of 2025.

Meanwhile, concerns about a U.S. government shutdown add to the economic uncertainty, with experts warning that such a shutdown could disrupt government operations, delay services, and cause financial losses for businesses reliant on government contracts. Prolonged shutdowns threaten to reduce economic activity and revenue across various sectors, compounding pressures on consumers already grappling with debt and inflation.

This combination of rising consumer financial stress, exemplified by car loan delinquencies, alongside fears of government shutdown-induced economic interruptions, underscores a precarious outlook for the U.S. economy moving forward.