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

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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.

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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.

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