That’s how much more U.S. consumers borrowed to buy cars last year—more than double the increase in any other year since at least 2004—because they’ve gotten so expensive.
The surge in borrowing, from $616 billion in 2020 to $734 billion in 2021, primarily reflects that people were taking out bigger, not more, new loans for cars, researchers at the Federal Reserve Bank of New York said Tuesday in their quarterly consumer credit report. Fueled by a shortage of semiconductor chips used in manufacturing cars, used car prices soared an unprecedented 37% in 2021 while stickers on new ones jumped nearly 12%, according to government data.
Because of the lack of public transportation in much of the country, consumers are something of a captive market for vehicles, researchers said in a briefing with reporters. There’s little they can do to avoid the rapidly rising prices besides driving their old cars for longer, or buying models that might be less expensive than they’re accustomed to, they said.
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