Auto loan delinquencies soar, subprime borrowers hit hardest as consumer resilience near collapse.

by
Sharing is Caring!

Tweet:

NEWS: Auto loan delinquencies keep climbing

Subprime delinquencies (FICO: 580–669) jumped 26 basis points to 5.17% in Aug.

Even prime loans (660–719) saw a slight uptick to 0.50% overdue.

The reason?

Consumers with auto loans originated in the past two years are falling further behind as elevated interest rates and vehicle prices squeeze household finances.

See also  Core Consumer Prices Rise For 53rd Straight Month, Hit New Record High (Shelter Index Increased 4.9 Percent YoY)

Of subprime auto loans originated in 2023, 13.4% are 30+ days to 90+ days overdue.

And there’s another red flag—

Loss severities (the portion of value investors lose when borrowers default) on 2023 subprime loans are the highest on record.

Bottom line: Consumer resilience has kept a recession at bay but it could be reaching its limits.

See also  Copper/gold ratio collapse signals economic implosion. High Yield Spread tightens to levels last seen in early 2007's pre-crisis era.


Views: 119

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.