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

by

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.

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.

Uh-oh! It looks like you're using an ad blocker.

Our website relies on ads and the generous support of readers like you to keep delivering free, high-quality content. Right now, we are facing serious funding challenges and we need your help more than ever. Disable your ad blocker and this message will vanish. You can also sign up for a membership to enjoy an ad-free experience while supporting our work: https://citizenwatchreport.com/plans/subscriptions/ Your support helps us stay independent, continue our work, and keep content free for everyone. We truly appreciate your understanding and thank you for standing with us.