Americans are falling behind on car payments at an unprecedented rate, particularly subprime borrowers struggling with rising loan and insurance costs.
According to Fitch Ratings, 6.6% of subprime auto borrowers were at least 60 days delinquent as of January 2025, the highest rate in decades.
The surge in delinquencies is largely attributed to the increasing cost of car ownership and broader economic pressures.
The Federal Reserve Bank of New York reported that 4.6% of all outstanding auto debt was at least 90 days late in the third quarter of 2024—an alarming 17.4% increase from the previous year.
Experts note that while mortgage delinquencies have returned to pre-pandemic levels, auto loan delinquencies have risen across various credit levels, with subprime borrowers hit hardest.
Non-captive auto finance companies — those not directly affiliated with automakers — have seen the most significant rise in missed payments. Higher interest rates, inflation, and stagnant wages have made it increasingly difficult for many Americans to keep up with their car payments.
The growing wave of auto loan delinquencies signals potential trouble for lenders and borrowers alike.
With vehicle prices remaining high and financial pressures mounting, the trend raises concerns about broader economic instability and the possibility of tighter lending standards in the future.