Millennials Suffer Another Indignity Among Economic Challenges

By: Lauren | Published: Feb 28, 2024

It’s been a rough few years for Millennials, from the COVID-19 pandemic to radically increasing mortgage rates and cost of living, all during a time when this generation is trying to buy property, start a family, and advance their careers.

Now, it seems that Millennials are struggling to pay their bills at all, and consequently, their cars are being repossessed.

LegalShield Released Staggering Statistics Last Week

LegalShield, an organization that offers legal advice or representation to members in need, released its January Consumer Stress Legal Index last week, and the data it collected is quite shocking.

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Woman sitting at her home office computer making a call and looking stressed

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It noted that even though consumer finance questions technically decreased, they have seen a significant increase in calls about car repossessions.

Millennials Made the Majority of the Calls Regarding Their Cars

LegalShield also reported that Millennials and Gen Xers undoubtedly made up the majority of received regarding car repossessions. In fact, Millennials made more calls about their cars in January of 2024 than they did in all of 2023.

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Dozens of cars sit in traffic in Washington, DC

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Warren Schlichting, CEO of LegalShield, explained that this phenomenon is certainly a sign of economic turmoil. He said in an interview, “Our data implies we’re not out of the woods yet.”

Why Can’t Millennials Afford Their Car Payments?

After the lockdown, things were supposed to return to normal, but it seems that Millennials are still struggling to pay their bills.

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Man with money and a computer, holding a toy car, signifying a car payment

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LegalShield attorney John Saltarelli explained, “Consumers we talk to only have enough money to cover some of their bills, so they prioritize a roof over their head ahead over other expenses,” such as car payments. Hence, the car repossessions.

What About Credit Cards?

Whenever times get tough, Americans are known for relying on their trusty credit cards to get them through until the next payday.

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Man holding an empty wallet and several coins in his hand

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However, Saltarelli noted that many Millennials (and members of other generations) have been “racking up high-interest credit cards.” So, while they have credit cards and are often signing up for new ones, they still don’t have what they need to pay every bill on time.

“Collectors Are Turning Up the Heat”

Saltarelli also explained that, “Collectors are turning up the heat after the pandemic. Therefore, those who owe significant or even smaller sums are being forced to make tough decisions, such as lagging behind on their car payments.

Person is receiving a large stack of cash after signing a loan contract

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And according to LegalShield, consumers are becoming increasingly more worried that they simply won’t be able to pay their bills next month.

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It’s Not Just Car Payments That Are Being Put Aside

In fact, LegalShield explained that their data shows young Americans aren’t just calling about car repossessions but also regarding billing disputes.

Couple going over their bills and calculating the totals

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From rent to utilities, credit cards, insurance, phone and internet bills, and everything in between, Millennials are being forced to pay later and later. Then, they need assistance from a lawyer when the companies either shut off their services or charge them exorbitant late fees.

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Are Millennials Just Bad at Saving?

Tell a Baby Boomer what’s going on with Millennials, and they may say that the younger generations are simply not savvy savers.

Hand placing coins in a piggy bank atop charts signifying savings

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The debate as to whether or not the next generations aren’t fiscally responsible or don’t want to work as hard as their predecessors will likely go on for many generations before, just as it has for decades. However, there is no doubt that life is getting more expensive.

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Let’s Talk About the Cost of Living in America

The cost of living is increasing all over the world, including the great old US of A. Inflation rates are up, goods and services are more expensive, and salaries have not increased enough to cover the difference.

Woman checking her receipt after grocery shopping

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According to the US Census, 41% of Americans are struggling to pay their bills every month. Not to mention the fact that 61% can’t afford to buy a home, and 60% don’t have the money for a new car.

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Cars Are Now Far More Expensive

The fact that more than half of the American population cannot afford to buy a new car, and more people than ever are having their cars repossessed due to late payments, is certainly concerning.

Aerial view of a parking lot full of cars

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And there is no doubt that while high living costs and plateaued salaries are playing a part in this reality, it’s also because cars have become wildly more expensive than ever before.

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The Average Car Payment in America Is $726

In 1999, the average new car cost somewhere between $20,000 and $30,000, while a used car would have been between $7,000 and $17,000.

Pre-owned vehicles are seen at the Roger Beasley South dealership lot on June 07, 2023 in Austin, Texas

Source: Brandon Bell/Getty Images

As of 2024, the average price for a new car is $48,759, whereas used cars are about $26,000. And according to Bankrate, the average American currently pays $533 for used cars and $726 for a new car per monthly car payment. Therefore, minimum wage full-time workers who make only $1,256 a month are spending almost half their income on a used car.

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Are Millennials Destined to Be Broke Forever?

Any financial expert will explain that the only constant in the economy is change. Year to year, decade to decade, the economy in the USA and around the world continuously and dramatically fluctuates from great to bad to good to disastrous.

A car is getting towed from a local neighborhood at night

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So, although Millennials are currently struggling to save money and hold on to their cars, it’s unlikely that this generation will be broke forever. However, if things stay the way they are for much longer, they will certainly struggle to save anything at all for the future.

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