As of January 2025, 6.6% of subprime auto borrowers were at least 60 days past due on loans, the highest rate recorded. Prime borrowers have lower delinquency rates. Factors contributing to this trend include rising vehicle costs averaging nearly $50,000, high lending rates over 9%, and soaring car insurance and maintenance expenses. Other indicators, like increased minimum credit card payments and growing delinquency rates in other credit sectors, signal worsening financial conditions for low-income borrowers facing inflation and high-interest rates.
The subprime auto loan market is facing serious challenges going into 2025, with delinquency rates soaring due to rising ownership costs and economic pressures.
High vehicle prices and increased loan interest rates are straining subprime borrowers, leading to a notable rise in delinquency rates across this group.
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