Fitch’s 60+ day delinquency rate for subprime auto loans hit 6.90% in January 2026.
That was higher than the worst levels reached during the 2008 financial crisis.
The rate has eased since then, reaching about 5.67% in June.
But that’s still an extraordinary level of stress.
And this isn’t happening in some tiny corner of the credit market.
Americans now owe roughly $1.71 trillion on auto loans and leases, up $58 billion, or 3.5%, from a year earlier.
The average amount financed on a new vehicle has reached a record $42,500.
The average new-car loan is running about 66.5 months.
And the average new-car payment is around $770 a month.
That’s the setup.
Cars got more expensive.
Borrowers stretched the loans.
Interest rates stayed high.
And the people with the weakest credit are now running out of room.
The latest overall auto-credit data shows 90+ day delinquencies reached 5.60% in Q1 2026, up from 5.21% the previous quarter.
The long-term average is only 3.59%.
But even that doesn’t show where the real damage is concentrated.
The Philadelphia Fed found that subprime borrowers make up only about 17% of active auto-loan accounts.
Yet they account for nearly two-thirds of all delinquent loans.
That’s a huge concentration of stress.
The weakest borrowers aren’t just slightly worse than everyone else.
They’re carrying a disproportionate amount of the problem.
And there’s another ugly number.
The Fed found that buy-here-pay-here auto loans were 16.63 times more likely to be in active repossession than loans from traditional auto lenders.
About 5% of those balances were in active repossession in Q3 2025, compared with less than 0.5% for traditional lenders.
Now think about what happens when these loans go bad.
The borrower stops paying.
The lender repossesses the car.
But the car has depreciated.
If the borrower owes more than it’s worth, selling the vehicle doesn’t make the loss disappear.
The lender takes the hit.
And we’ve already seen what that can look like.
Subprime lender Tricolor collapsed and filed for bankruptcy.
It had raised more than $1.9 billion through asset-backed securities before its collapse. This week the SEC sued three former executives over an alleged scheme involving hundreds of millions of dollars of subprime auto loans.
That’s why I don’t think the 6.9% number should be treated as just another consumer statistic.
It’s showing us where the credit system is cracking first.
And the timing is important.
The average new vehicle now costs around $52,000.
Average auto rates are roughly 7% for new cars and 10.5% for used cars, with rates for poor-credit borrowers reaching above 20%.
So the weakest borrower isn’t dealing with one problem.
They’re dealing with an expensive asset, expensive financing and a payment that can run for nearly six years.
And the broader consumer hasn’t even collapsed.
That’s what makes the subprime numbers interesting.
This isn’t a story about every American suddenly stopping their car payments.
Prime borrowers are still holding up much better.
It’s the bottom of the credit ladder that’s getting crushed.
That’s usually where you want to look first.
Because if unemployment rises, the people currently making those payments don’t suddenly become prime borrowers.
They lose income.
They miss payments.
Cars get repossessed.
Lenders take losses.
Credit standards tighten.
And the next person who needs a loan has a harder time getting one.
Meanwhile, Americans are still taking on more auto debt.
The Fed’s latest data showed $211 billion of auto loans originated in Q2 alone, a record quarterly amount.
So we’re simultaneously seeing:
Record auto borrowing.
Record new-vehicle financing amounts.
Elevated overall delinquency.
Subprime delinquency above the worst levels of 2008.
And lenders already getting hit by failures and losses.
That doesn’t mean 2008 is happening again.
But it does mean the weakest part of the consumer credit market is already flashing red.
And the most important number may not be 6.9%.
It may be what happens to that number if the labor market gets worse.
Because 6.9% happened before a full-blown recession.
If the weakest borrowers are already struggling this badly while people still have jobs, what happens when they don’t?
That’s when a subprime auto problem can stop being a niche problem.
It can become a lender problem.
Then a credit problem.
Then a consumer spending problem.
The first people to break usually aren’t the people with the strongest balance sheets.
They’re the people who were barely making the payment in the first place.