1.5M cars are expected to have been repossessed by the end of this year. Suggesting that a huge pile of unpaid property taxes may be expected over the next year too.
A variety of other economic factors and trends are likely to lead to even more people falling behind on vehicle payments, finding they cannot afford new ones, and then defaulting on other bills too.
What’s happening? Where do property taxes fall in this new debt crisis? How can you manage escalating tax bills?
Late Car Loan Payments Stack Up At Record Pace
The number of car loan borrowers who are at least 60 days late is now at a 30 year high.
With the average price of a car now at $48,000, and payments often over $1,000 a month. Which is also an all time high.
This situation is likely to get worse as we roll into the new year, and many add holiday shopping, entertainment, and more debt to their finances.
Even those who thought they were in a strong position, with a car paid off, or a low interest rate are running into problems. If they get into an accident, then they have to finance a new car, at today’s much higher rates and payments.
Driver assist and autonomous features are also growing as a problem. In most cases it appears that the driver of the vehicle is still responsible for a crash, even if it was their car that caused it. Meaning trying to get new insurance is going to be astronomically expensive. Perhaps at least another $600 per month.
Housing
Many individuals will stop paying their housing related payments before their vehicles. After all, with no car, many may not be able to get to work at all, or pack up their things and move in with family members.
Though lenders often expect that borrowers will give up paying on their vehicles before the roof over their head.
In either case, this means at least 1.5M households could also be on the verge of defaulting on their homes in some way or another this year.
Most try to make their mortgage payments, but are not correctly prioritizing their property tax bills. Which can also lead to foreclosure.
The Result
As a result of the above, local governments may incur more expenses to deal with unemployment, homelessness, and abandoned properties. At the same time, they may be receiving less revenues from property taxes.
Don’t be surprised if this leads to tax rate increases to make ends meet.
This is your chance to get ahead. Challenge your property tax bills to ensure that you are not being overcharged. Then prioritize paying your property tax bills so that you don’t lose your home.