The growing costs to buy and maintain a car –exacerbated by inflation and tariffs –are leading to rising auto loan defaults and repossessions and a potential crisis for American consumers left unprotected by the federal government, according to a new report by a consumer advocacy organization.
The record number of defaults is a canary in the coal mine for large-scale economic problems, the Consumer Federation of America (CFA) warned.
“Delinquencies, defaults, and repossessions have shot up in recent years and look alarmingly similar to trends that were apparent before the Great Recession,” according to a report by the CFA, which gave USA TODAY an exclusive first look.
Cars are more expensive than ever, according to the CFA report, “Driven to Default: The Economy-Wide Risks of Rising Auto Loan Delinquencies.” The average vehicle sells for nearly $50,000 and almost 20% of new car buyers are paying $1,000 or more a month, the report said. Nearly 1 in 5 new car buyers in the first quarter of 2025 has a loan that is seven years long. Used car prices had also risen 6.3% year over year in June 2025, CFA said.
CFA is sending the report to members of Congress on Sept. 10, calling for an end to “exploitative practices,” including interest-rate kickbacks, where dealers and lenders “conspire to secretly inflate interest rates and share the profits gleaned from the consumer’s overpayment.”
Americans owe more than $1.66 trillion in auto debt and a crisis is happening “just as our nation’s federal watchdogs – the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) – have taken significant steps back from oversight and enforcement of predatory practices in the auto market,” the report said.
The CFPB did not respond to a request for comment by the publication deadline. But White House Spokesman Kush Desai told USA TODAY: “President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance unleashed historic working-class prosperity during his first term, including the first decline in wealth inequality in decades. The Administration is committed to restoring the historic economy of President Trump’s first term with this same economic agenda, and the Federal Reserve could augment our pro-growth policies and deliver interest cost relief for everyday Americans by finally cutting interest rates.”
Among the CFA’s concerns are what it called the gutting of the CFPB budget by Congress, “even as the Bureau receives record high numbers of complaints about auto loans.”
The organization also said “the FTC “has not brought a single case against a car dealer since Trump installed new leadership, and the Commission refused to appeal the Fifth Circuit Court of Appeals decision striking down the overwhelmingly popular, cost-saving CARS Rule,” which would have prohibited bait-and-switch tactics and hidden junk fees. The FTC has also “abandoned its work to address widespread dealer discriminatory add-on pricing,” which often adds unneeded items to the cost of a car, the report said.
In a response to USA TODAY, an FTC spokesman said the agency would not respond to the question about why it did not appeal the CARS rule, but said that the agency has “brought some strong enforcement actions designed to protect consumers in this space, with some currently in litigation.”
Auto loan defaults are indicative of overall consumer stress, and “that usually means consumers have stretched everything else that they can in their household,” Erin Witte, CFA director of consumer protection and co-author of the report, told USA TODAY.
Car buyers with above-average credit scores (620-679) were twice as likely to fall behind as they were before the pandemic, the report said. Borrowers aged 18 to 29 are also falling 90 or more days late on auto loans faster than older borrowers.
Repossessions are at the highest level since 2009 and jumped an estimated 43% from 2022 to 2024, the report said, citing data from Cox Automotive Market Insights and Outlook.
Consumers can fall into a debt spiral when they can’t afford their car payment, Witte said.
That’s what happened to Erinn Compton.
The Rockford, Illinois, woman ran into mechanical problems with a 2014 Chrysler Model 200 with 95,000 miles almost immediately after buying it in 2023. She’d put $1,745 down and financed nearly $12,000 for 42 months. Compton was unsuccessful in returning the car to the dealership, which said it had a 30-day return policy. She also had title problems with the auto financing company.
Compton’s bills added up, including car repairs, and she missed two of her roughly $285 monthly payments. Her car was repossessed and with no way to get to work, she lost her job and apartment. The auto loan company is also suing her for $6,000.
“Although my story is complex, the solutions are easy to solve these continuous cycles of burden for any and everyone,” Compton told USA TODAY. “Our country is in a state of crisis from not just big things but also these everyday little things that are overlooked by the highest levels and wealthy corporations that don’t have to feel it directly.”
Compton is now substitute teaching, but said losing her car in 2023 threw her into a battle of homelessness, which persists. Two nights before Compton spoke to USA TODAY, she said she was sleeping in her car, but is now staying temporarily with a friend.
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The Federal agencies charged with protecting consumers have become politicized, as Biden-appointed commissioners have been removed by the Trump administration, said Witte.
Other consumer advocates agree that more protections are needed.
“People are hopelessly outgunned when they go to a car dealer,” Rosemary Shahan, president of Consumers for Reliability and Safety said, adding that “the agencies that are there to protect us at the Federal level have abandoned consumers.”
Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher and @blinfisher.bsky.social on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays,

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