Car owners are missing their monthly payments at the highest rate in over 30 years.
In January, the percentage of subprime auto borrowers who were at least 60 days past due on their loans rose to 6.56%, the highest since data collection began in 1994, according to Fitch Ratings. A slowing economy and the continuing impact of inflation have made it increasingly difficult for many consumers to keep up with their bills. Auto loans have been particularly troublesome, as rising car prices and elevated borrowing costs have led to a surge in repossessions.
The Federal Reserve Bank of New York recently reported that the share of auto loans among all borrowers that transitioned into serious delinquency—defined as being 90 days or more past due—rose to 3% in the fourth quarter, the highest level since 2010.
This latest increase in delinquencies among subprime borrowers comes at a critical time for the U.S. economy, as trade wars under President Donald Trump create volatility in the stock market and concerns about sluggish economic growth grow.
Typically, delinquencies rise in January and February following the holiday spending season. Fitch classifies subprime auto borrowers as those with credit scores of 640 and below. In contrast, those with higher scores are doing better, with only 0.39% of prime borrowers being at least 60 days past due in January, up from 0.35% a year earlier.
Other economic indicators also point to declining financial health among Americans. Consumer debt has surged recently, reaching the highest levels on record, while consumer confidence has dropped the most since 2021.
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