The Blubber

Car owners are falling behind on their monthly payments at the highest rate in over three decades.

In January, 6.56% of subprime auto borrowers were at least 60 days delinquent on their loans—the highest level recorded since data collection began in 1994, according to Fitch Ratings.

A weakening economy and the lingering effects of inflation have made it increasingly difficult for many consumers to keep up with their financial obligations. Auto loans have become a particular burden, as rising vehicle prices and high borrowing costs have fueled a wave of repossessions.

The Federal Reserve Bank of New York recently reported that the share of auto loans transitioning into serious delinquency—defined as 90 days or more past due—climbed to 3% in the fourth quarter, marking the highest level since 2010.

Americans Struggle with Car Payments

The percentage of borrowers at least 60 days late on their auto loans is at a record high.

Source: Fitch Ratings

The surge in delinquencies among subprime borrowers comes at a crucial moment for the U.S. economy, as President Donald Trump’s trade disputes contribute to stock market volatility and concerns over slowing economic growth.

“The lower-income segment has been hit the hardest, and we expect that to continue this year,” said Mike Girard, senior director for asset-backed securities in North America at Fitch. “There’s still the ongoing impact of higher inflation and interest rates.”

Delinquencies tend to rise in January and February following the holiday season, Girard noted, with some improvement typically occurring in March and April when taxpayers use refunds to pay down debt.

Fitch categorizes subprime auto borrowers as individuals with credit scores of 640 or below. Borrowers with stronger credit profiles are faring better—only 0.39% of prime borrowers were at least 60 days late on payments in January, a slight increase from 0.35% a year earlier.

Other economic indicators also point to declining financial stability among Americans. Consumer debt recently saw its largest increase on record, while consumer confidence experienced its steepest drop since 2021.