What's harder for some people than submitting their car payment on time every month? Admitting they shouldn't have purchased the vehicle in the first place.

But consumers, more than usual these days, may have to do exactly that in order to find a way out of the financial hole they've dug for themselves.

"Going into bunker mode is simply the worst option," said Paul Oster, president of credit repair firm Better Qualified in Eatontown. "People have a tendency not to answer the phone, they don't answer the mail, and they don't answer the door."

Seven million Americans, the most ever, are 90 days or more behind on their auto loan payments, according to data from the Federal Reserve Bank of New York. "Serious delinquency" describes 2.4 percent of auto loans at the end of 2018.

Oster said the record-high delinquency rate is a "yellow flag" in an otherwise strong economy.

"We're pretty much in the Ponzi phase of the subprime auto loan market," Oster said, referring to the riskiest segment of the Hyman Minsky financing model.

"The borrowers simply have too much junk in the trunk, as they say," Oster said.

Individuals under 30 are struggling with auto loans the most — many of them are staring down a massive amount of student loan debt at the same time.

Making matters worse for borrowers overall, Oster said, is how quickly a vehicle's value depreciates once it's driven off the lot.

And, unlike other forms of borrowing such as credit cards, a minimum payment isn't an option with car loans when times are tight.

​But consumers do have options as they attempt to avoid a repossession of their vehicle and a big hit to their credit score, among other potential penalties.

"Face this head on," Oster said. "Reach out to the finance company, reach out to the dealership, let them know that you really did bite off more than you can chew."

In most cases, consumers can refinance their auto loan, he said. But that's an easier task before you're 30, 60 or 90 days behind on payments. Another option, if it's available, is switching out to a more affordable vehicle.

"The dealerships don't want another repossessed car," Oster said. "The depreciation is the same for them as it is for a consumer. So they want to work with you to get that car into somebody else's hands maybe get you into a less expensive car with a payment that you can actually afford."

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