TLDR: Subprime auto loan delinquencies hit 6.9% in January 2026, the worst in over 30 years, while average monthly payments exceed $750 and stress spreads to prime borrowers. With 1.73 million repos in 2024 and tariffs threatening to add thousands more to sticker prices, the affordability crisis is reshaping the auto finance ecosystem from the bottom up.
There’s a number that separates a rough patch from a crisis. In the auto loan market, that number is 6.9%.
That’s the subprime 60-plus day delinquency rate for January 2026, according to Fitch data analyzed by Wolf Street. It is the worst reading since the early 1990s. Not since the savings-and-loan crisis have this many borrowers fallen this far behind on their car payments. And unlike the early ’90s, today’s average monthly car payment exceeds $750, according to Cox Automotive data.
Four Years of Getting Worse
The headline figure is bad enough. The trend line is worse. Subprime serious delinquencies have hovered at or near record levels for almost four consecutive years, grinding upward from already elevated post-pandemic baselines. December 2025 posted 6.74%. January pushed past it.
| Period | Subprime 60+ Day Delinquency Rate | Trend |
|---|---|---|
| 2022 (avg) | ~5.3% | Rising from post-pandemic lows |
| 2023 (avg) | ~5.8% | Surpassing pre-pandemic highs |
| 2024 (avg) | ~6.2% | Worst since Great Recession |
| December 2025 | 6.74% | New 30-year record |
| January 2026 | 6.9% | Worst since early 1990s |
The damage extends beyond missed payments. Some 1.73 million vehicles were repossessed in 2024, the highest total since 2009. Auto loan defaults surpassed 2.3 million that same year, exceeding recession-era peaks. And 28% of trade-ins now carry negative equity, averaging $6,905 upside down.
Federal Reserve research points to a specific culprit: the surge is concentrated in loans originated since 2022, when vehicle prices spiked and lenders stretched terms to make monthly figures look manageable. Those chickens are arriving at the repo lot.
Climbing the Credit Ladder
The stress is no longer contained in the subprime bucket. That’s what should concern every F&I manager and dealer principal reading this.
Delinquencies are spreading to prime and near-prime borrowers, the customers who were supposed to be insulated. When average monthly payments exceed $750 and nearly one in five loans or leases top $1,000, solid credit scores can’t overcome basic math. Add insurance costs averaging $178 per month (per Insurify), and total monthly vehicle ownership approaches mortgage territory in many markets.
This isn’t a subprime problem anymore. It’s an affordability problem working its way up the income ladder.
The Watchdog That Isn’t Watching
Senator Elizabeth Warren sent letters to 12 major auto lenders in early February demanding repossession data and underwriting practice disclosures. It’s the most aggressive congressional scrutiny the auto finance sector has received since the post-2008 regulatory wave.
The timing matters. The regulatory infrastructure designed to respond to exactly this kind of consumer stress is being dismantled. The Trump administration has gutted the Consumer Financial Protection Bureau, removing the primary federal watchdog overseeing auto lending practices. Warren’s letters are landing in a regulatory vacuum: lenders face congressional questions but limited enforcement risk.
The Math Gets Crueler
Tariffs threaten to add $2,000 to $6,400 per vehicle, with some estimates ranging higher depending on import content. Average transaction prices already sit near $50,000. Every price increase pushes more buyers into longer loan terms, higher monthly payments, and deeper negative equity, feeding the exact dynamic that produced the 6.9% rate in the first place.
The used market offers limited relief. While wholesale values remain stable (Manheim’s mid-February indexheld at 210.0 with a strong 62.5% conversion rate), those values are partly propped up by tariff-driven new vehicle price floors. For the buyer who can’t manage $750 a month on a new car, a $25,000 used vehicle at 9% interest isn’t salvation. It’s the same trap with different upholstery.
What This Means on the Lot
For dealers, the implications hit immediately. F&I departments face tightening lender approvals, higher advance rates on negative equity trade-ins, and a growing share of customers who simply can’t qualify at current price levels. The two-track market, where high-income buyers purchase freely while the volume middle gets squeezed out, is no longer a forecast. It’s showing up in the credit applications.
Edmunds projects 16.0 million SAAR for 2026, down from 16.3 million in 2025. That modest decline masks a structural shift underneath: the buyers who remain in the market skew wealthier, leaving dealers increasingly dependent on a narrower customer base.
The question isn’t whether delinquencies keep climbing. Barring a sudden reversal in vehicle prices or tariff policy, the math doesn’t allow for improvement. The question is whether the industry’s response will be to extend terms further and loosen standards again, building the next cycle’s crisis on top of this one, or whether someone decides that $750 was the line that shouldn’t have been crossed.
Nobody in Detroit or Washington appears to be drawing that line.
