A few years ago, debts had piled up while Mr. Massey was attending the University of Central Florida; he lost his financial aid and had to drop out. Juggling too many bills, he fell behind on the loan for his 2013 Honda Civic. In the fall of 2021 it was repossessed – but because he still owed $4,800, the loan balance, he had to keep making payments on a car he didn’t own.
Mr. Massey spent most of 2022 without a vehicle. It was technically feasible; he lived only a few miles from where he worked, at Walmart. But the bus wasn’t reliable, and when he tried to walk or bike, he’d end up soaked in sweat or a sudden downpour. After a while, he’d had enough.
“I just ended up biting the bullet and saying, ‘I need to get another car,’” Mr. Massey said. “I know what happened to the last one, but it’s a necessity. If we had some kind of rail system or something like that, it’d be fine. But we don’t.’”
This time, though, getting a car was even more expensive. The cheapest reliable car he could find, a Toyota Corolla with 89,000 miles, cost $18,240 including taxes and fees. With a 15.2 percent interest rate and an extended warranty, that left him with monthly payments of $451.
Looking for insurance, he couldn’t find anything less than $323 a month for the most basic plan.
Soon after, he switched from Walmart to a Winn-Dixie and took a second job working part time at Amazon, a 35-minute drive from his apartment. Gas for those commutes cost about $40 per week, bringing the monthly total to nearly $1,000, plus occasional maintenance, like the $100 for his last oil change and $27 to fix a slowly leaking tire.
“For someone who’s making a decent income, that might not be as hard,” Mr. Massey said. “But for someone like me who’s in the middle of trying to change careers making $15.50 an hour, it hits you like a truck.”
Mr. Massey thought about selling his Corolla and trying to find something even cheaper. The problem is, he still owes about $16,000 on the car, and its book value is only about half that, so he’d have to pay off the difference – again.
That’s an increasingly common experience, as the average used-car loan at origination has reached 123 percent of the vehicle’s market value, according to TransUnion. And although overall delinquency on auto loans is low, delinquencies have been climbing quickly since interest rates started increasing in 2022.
In August, he switched to a job driving full time for one of Amazon’s delivery contractors making $18.75 an hour, which comes to about $3,000 a month before taxes. Rent for his apartment with roommates is $700, leaving little for food and the credit card bills he’s still trying to pay off.
Mr. Massey is building his software programming portfolio so he can start applying for jobs that pay more – at least enough to afford his car.
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