Subprime auto loan delinquencies have reached their highest level in over 30 years, with the percentage of borrowers 60 days or more behind on payments hitting 6.5 percent in January, according to Fitch Ratings. The delinquency rate has doubled since 2021 for consumers with credit scores below 670.
Repossessions accelerated sharply. Cox data shows 1.73 million vehicles were seized last year—the highest level since 2009, a 43 percent increase from 2022 and 16 percent from the prior year.
Lenders have tightened origination standards. Subprime's share of auto loan and lease originations fell to 15.0 percent in the third quarter of 2025, down from 16.9 percent a year earlier, according to Harney Partners. This pullback signals reduced appetite for new lower-credit exposure.
The cost burden on borrowers has intensified. Average monthly car loan payments now exceed $750, creating stress particularly acute for subprime households. The Consumer Financial Protection Bureau has documented a sharp rise in repossession complaints.
Lender responses have diverged. Some have extended loan terms for struggling borrowers while others have accelerated repossession timelines, as reported by Paige Smith and Ann Choi.
The deterioration raises systemic questions. Should delinquencies continue climbing, tightened borrowing conditions could depress vehicle purchases, impairing mobility and employment for vulnerable households and reducing overall consumer demand. The Kaplan Group noted auto debt carries serious subprime collection risk, though it is not yet comparable to the 2007-2008 housing collapse.
