Auto loans: cars drive debt

Americans have been upgrading automobiles at an impressive clip in 2005. July sales climbed to 20.8 million units on an annualized basis, a sales rate not seen since 1986.

And auto loan maturities are growing in order to make payments more affordable. 88 percent of new car loans are now longer than 48 months, up from 85 percent a year ago, according to the Consumer Bankers Association. 45 percent of loans mature in over 60 months.

But auto loans look to shrink as a percentage of household debt in the near term because of slumping auto sales after Katrina.

New vehicle delinquencies declined 18 percent in 2004, and used vehicle delinquencies fell by 3 percent, according to the CBA.