Record 7 million auto loans delinquent by 90 days

Young borrowers represent an increasing proportion of loans in serious delinquency.

The number of car owners who are at least 90 days late on their auto loans has reached a record seven million borrowers, despite seemingly strong economic and jobs indicators in the US.

The boom in car sales has been associated with strong increase in new auto loans, with $584 billion in new loans and leases appearing on credit reports last year -- the highest level in the nearly two decades of record keeping, according to the Federal Reserve Bank of New York.

The growth was primarily driven by loans handed to the most creditworthy individuals. Unsurprisingly, however, previous increases in 'subprime' lending to borrowers with poor credit scores has created a mix with a larger number of borrowers at high risk of delinquency.

"Borrowers with credit scores less than 620 saw their transitions into delinquency exceed 8 percent in the fourth quarter (annualized as a moving sum), a development that is surprising during a strong economy and labor market," the NY Fed wrote in a blog post.

The transition into serious delinquency appeared to be worst among buyers in the 18-29 age group, hinting at economic troubles for younger citizens.

The report notes that there were more than a million more troubled borrowers last year than at the end of 2010, when the rate of delinquency peaked amid the recession.

"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," the NY Fed concluded.