Outsized auto loans are driving more and more borrowers to fall behind on payments.

Data released Tuesday by the Federal Reserve Bank of New York show that car owners fell a month or more behind on their auto loan payments at an annualized rate of 7.7% in the fourth quarter. That's the highest rate since the last quarter of 2010, based on a New York Fed survey as well as data from Equifax and the Philadelphia Fed.

The data show how hard household budgets have been hit by the combination of prices for vehicles soaring during the pandemic and interest rates on loans jumping over the last two years because of the Federal Reserve’s campaign of anti-inflation rate hikes.

“Delinquency transition rates have pushed past pre-pandemic levels, and the worsening appears to be broad-based,” researchers at the New York Fed wrote in a blog post. “Loans opened during 2022 and 2023 are, so far, performing worse than loans opened in earlier years, perhaps because buyers during these years faced higher car prices and may have been pressed to borrow more, and at higher interest rates.”

Growing numbers of borrowers have car payments that are more than $1,000 a month, and average payments have been increasing too, according to the New York Fed. The average monthly payment on a new-car loan rose to $623 in the fourth quarter, the highest ever, despite a decline in car prices over that period. The average auto loan rate for a new car was 9.2% in December, and 13.8% for a used car loan according to auto market data company Cox.

The New York Fed’s data suggest that lower-income borrowers are being hit the hardest, with delinquencies rising fastest in lower-income areas. 

That’s especially true for borrowers in their thirties who are more likely to have student loan debt, and who are also increasingly struggling with credit card payments, researchers said on a conference call with reporters. The resumption of required payments on federal student loans has added financial stress to borrowers in that age group, and could get worse as time goes on, they said.