Bankruptcy and bankruptcy are on the rise for auto borrowers
Bankruptcies have been rising in the United States, but the trend may be a bit trickier than you might expect, according to a report from Credit Suisse.
In its monthly Automotive Credit Report, the bank says there were 8,957 auto bankruptcies in October alone.
It’s up from 8,838 in October of last year.
In contrast, there were just 4,764 bankruptcy filings in 2016.
That’s a decrease of just over one-third.
That said, Credit Suse says that the pace of bankruptcies is actually going down, rather than rising.
In the past year, bankruptcy filings declined by more than three-quarters, from a peak of about 4,000 in October to about 2,500 in November.
As of October, bankruptcy was the leading cause of default for credit card and auto loans, the report says.
Credit Suse cites a number of factors that contribute to bankruptcy, including the high cost of credit and credit card debt, high default rates and high rates of foreclosures.
Auto lenders are also more likely to foreclose on borrowers who defaulted than in other credit markets, the research finds.