Americans owe $1.66 trillion in auto debt right now. Repossessions jumped 43% in two years. Nearly one in five new car buyers is paying over $1,000 monthly. And Congress just gutted the agencies meant to protect you from predatory dealers.

The Consumer Federation of America dropped a bombshell report showing auto loan defaults look "alarmingly similar" to trends before the Great Recession. Remember 2008? When everything collapsed? Yeah, that's where we're headed, except this time it's your Honda Civic pushing us off the cliff.

The average car now costs nearly $50,000. Used cars are up 6.3% year over year. Twenty percent of new car buyers are stuck with seven-year loans - that's basically a mortgage for something that loses value the second you drive it off the lot.

Meanwhile, the Consumer Financial Protection Bureau and Federal Trade Commission—the cops supposed to be watching these dealers—have basically gone on vacation. The CFPB's budget got slashed even as auto loan complaints hit record highs. The FTC hasn't brought a single case against a car dealer since Trump's new leadership took over.

They also refused to appeal when courts struck down the CARS Rule, which would've banned bait-and-switch tactics and hidden fees. You know, the garbage dealers pull every single day.

White House spokesman Kush Desai responded with typical word salad about Trump's "historic working-class prosperity" and blamed the Federal Reserve for not cutting interest rates. Because apparently it's the Fed's fault dealers are shysters, not the administration that neutered consumer protections.

Erinn Compton's story shows exactly how this plays out. She bought a 2014 Chrysler with 95,000 miles in 2023. Put down $1,745, financed $12,000 for 42 months. The car broke immediately. The dealer said tough luck, 30-day return policy. She missed two $285 payments trying to fix the lemon they sold her.

The series of events to follow are sadly not uncommon these days: Car gets repossessed. Can't get to work without a car. Loses her job. Loses her apartment. The finance company's now suing her for $6,000 on top of everything else. Two nights before talking to USA TODAY, she was sleeping in her car. She's substitute teaching now, temporarily crashing with a friend. She stated,

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.

That's one person's story, but millions are living versions of it. People with decent credit scores (620-679) are twice as likely to fall behind as before the pandemic. Young borrowers aged 18-29 are drowning fastest.

Erin Witte from CFA explained the death spiral:

Consumers have stretched everything else that they can in their household.

Translation: people are choosing between car payments and groceries, and the car's losing.

The really sick part? Dealers and lenders are making bank on this misery through what CFA calls "interest-rate kickbacks." They secretly jack up your rate, split the extra profit. You think you're getting 8% because of your credit, but it's really 5% plus 3% the dealer pocketed.

"People are hopelessly outgunned when they go to a car dealer," said Rosemary Shahan from Consumers for Reliability and Safety. Adding,

The agencies that are there to protect us at the federal level have abandoned consumers.

The FTC spokesman claimed they've brought "some strong enforcement actions," but couldn't explain why they didn't appeal the CARS rule decision. That's like a firefighter bragging about saving a cat while the whole neighborhood burns.

CFA's sending this report to Congress today, demanding action on exploitative practices. Good luck with that. The same Congress that slashed CFPB's budget is definitely going to crack down on their dealer donors.

We're watching a slow-motion crash. Cars cost too much. Loans last too long. Interest rates are predatory. The agencies meant to protect consumers have been defanged. And when it all collapses, guess who won't suffer? The dealers, lenders, and politicians who created this mess.

Erinn Compton lost everything because she needed a car to get to work. That's not a personal failure - it's a systemic breakdown. In America, you need a car to survive, and the people selling them know it. They've turned that necessity into a wealth extraction machine.

The canary in this coal mine isn't singing anymore. It's dead. Auto loan defaults are screaming that American consumers are tapped out, and nobody in power seems to care.

When teachers are sleeping in their cars because they couldn't afford the payments on their other car, we've crossed from economic policy into moral failure. But sure, let's wait for the Federal Reserve to fix it with interest rates.

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