America’s $1.7 trillion auto loan market is headed for a crash

U.S. auto loan debt expanded to a record $1.713 trillion, surpassing student loans ($1.65 trillion) to become the second-largest category of consumer debt behind mortgages. The rapid expansion in total balances has brought sharp credit deterioration across lower-tier borrowers, driven by high monthly payments, extended loan terms, and persistent vehicle price inflation.

Subprime auto loan 60-day delinquencies peaked at 6.82% in 2026, marking a 32-year high that surpasses levels recorded during the 2008–2010 financial crisis. Serious delinquencies (90+ days past due) across all auto balances rose to 5.49%, hitting their highest overall level since 2010 as younger and lower-income households struggle under elevated interest rates.