Americans really don't want to lose their rides. A study finds that the cash-strapped among us are paying off their car loans before they pay credit card bills and make mortgage payments. It used to be that Americans would pay their home loans first, then their credit card and car loans. After all, homes have been the most valuable possession for most people for decades, and nobody wanted to jeopardize that. But TransUnion, a credit information company, studied the payment patterns of 4 million Americans with at least one car loan, one credit card, and a mortgage and found a clear priority for staying current on the car loan.
Among Americans who were late on payments last year, 39% were delinquent on the mortgage while current on the car loan and credit cards, and 17% were late on credit cards while current on the other two. Only 10% were late on the car loan while current on the other two. "Today, most people need a car to get to a job or to look for a job, and that has made cars a priority," says a TransUnion VP. And there is also more leeway on the mortgage. Foreclosure can take two to three years; cars can be repossessed 90 days after people stop paying.