Researchers at the Federal Reserve Bank of New York said this Tuesday that at the end of 2018, seven million people were 90 days or more behind on their car payments. That is one million more than when the country was recovering from the Great Recession in 2010.

The Vice News reported that these figures are in stark contrast to the low unemployment rate (currently at around four percent) and the Labour Department announced this week that job openings are up to 7.3 million, which is a good sign of a strong job market. So, if the economy seems to be in good shape, what is behind these record late car payments?

"The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector," stated the Fed researchers. While there are many auto loan borrowers out there who have access to stable lenders like credit unions thanks to their high credit scores, there are a growing number of subprime loans being granted to those who can ill afford to fall behind on payments.

The majority of past-due car payments are perhaps unsurprisingly among younger people with low credit scores, and they are the ones who inevitably turn to less reputable lenders who generally charge higher interest rates. The situation may worsen with the Trump administration's Consumer Financial Protection Bureau announcing recently that it wants to scale back a regulation on vehicle title and payday loans that holds the lender responsible for figuring out whether borrowers can afford to repay their high-interest loans. This may increase vehicle sales in the short term but it could also worsen the situation too.

While opportunistic lending practices and Government regulations may take some of the blame, it should not remove the individual's responsibility to assess whether they can afford the vehicle they are intending to purchase.

The recent impressive sales figures by a number of major manufacturers show that shoppers are flocking to dealerships in record numbers when clearly many shouldn't be. With so many affordable, quality used vehicles out there, surely situations like this can be avoided with a bit of common sense.