Consumers are continuing to prioritize auto expenses ahead of other payments, a credit bureau study finds, despite record job losses and shelter-in-place orders preventing many consumers from driving beyond trips to the grocery store or to seek medical care.
Those financially affected by COVID-19 closures were about twice as likely to default on a mortgage than an auto payment, maintaining historical trends of ranking transportation needs above other credit products, according to the survey of nearly 3,000 U.S. consumers conducted by TransUnion.
Charlie Wise, head of global research and consulting at TransUnion, said U.S. consumers who have lost jobs or hours during the pandemic are not willing to turn over their keys just yet.
“The recognition many consumers have is, this isn’t going to be forever,” Wise said. “At some point, we will be let out of our homes. When that call comes, I don’t want to be without a car.”
About 61 percent of respondents said their income had been affected as a result of COVID-19 closures, with millennials the generation most likely to report having lost their job.
Roughly 31 percent of respondents listed auto loan payments among those they will struggle to pay in the short term, the study said. Credit cards were cited by 43 percent of respondents, and housing payments by 59 percent.
The study also revealed that about 20 percent of consumers had deferred a planned auto purchase, a positive indication of pent-up consumer demand.
“That may be a large number of consumers flooding back to the dealerships and looking to make purchases,” Wise said.
