Many Americans are putting their auto loan payments ahead of credit card debt and mortgages, according to a recent study by TransUnion. The analysis looked at about 4 million consumers that had at least one auto loan, a credit card and a mortgage, and found a preference for remaining current on auto loans over the other types of financing.
Keeping a car
The study found that 39.1 percent of consumers were current on auto loans and credit card debt while delinquent on mortgages, 17.3 percent were current on auto loans and mortgages while delinquent on credit cards and 9.5 percent were delinquent on auto loans while current on credit cards and mortgages. Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit, said in a statement:
The reversal in payment patterns between credit cards and mortgages has been well documented, but our findings were illuminating because it had not been previously clear that auto loans were considered a higher priority by consumers than both credit cards and mortgages. With unemployment remaining high and real estate values remaining stagnant or further depreciating, consumers continued to pay their credit cards ahead of their mortgages. However, the importance of their auto loans appears to have trumped even the value they place on their credit cards.
For many people, keeping current on car payments may be viewed as a necessity because they need transportation to work or to complete other errands and tasks. Falling behind on credit card debt can impact their credit, but they are unlikely to experience any real change in their daily lives.
If you are struggling and need help with debt, consider working with a debt counseling firm. A debt counselor may be able to help you put together a debt management plan to get bills under control. It's important to get help as soon as possible so you won't have to choose between paying on credit card debt, auto loans and other bills.