Subprime Auto Loan Delinquencies Hit Highest Level Since 2010

Subprime auto loan delinquencies just hit 6.9 percent, the highest rate in sixteen years. That's loans at least 60 days past due, and it's a problem that affects you whether you're buying, selling, or just trying to keep your current car.

Lenders are already tightening standards. If your credit score sits below 620, expect higher interest rates, larger down payment requirements, and more loan denials than you saw six months ago. Some captive finance arms are quietly pulling back from subprime altogether, leaving that business to specialized lenders who charge brutal rates.

This matters even if your credit is solid. Tighter lending standards mean fewer qualified buyers in the market, which puts downward pressure on used car values. If you're planning to sell or keep your current vehicle, understand that the pool of people who can actually get financed to buy it is shrinking.

What You Should Do

If you're shopping and your credit isn't perfect, get pre-approved before you set foot in a dealership. Know exactly what rate and terms you qualify for. Don't let a dealer tell you what's possible until you've already checked with your bank or credit union.

If you currently have a subprime loan and you're struggling, refinancing might help, but only if your credit has improved since you bought the car. Check our refinance verdict to see if it makes sense.

For everyone else, this is a yellow flag about the broader economy. When people can't make car payments, it usually means financial stress is spreading. We're not calling a recession, but we are saying you should think twice before stretching your budget on a new car purchase right now. Stick to what you can comfortably afford, and keep an emergency fund that covers at least three months of car payments.