Americans are missing their car payments at the highest rate in decades, according to Finch Ratings data.
Why it matters: Car costs, including loans and insurance, have soared in an economy where consumers are showing mounting signs of stress.
By the numbers: 6.6% of of subprime auto borrowers were at least 60 days past due on their loans as of January 2025.
- This is the highest level since the agency began collecting data. The fall and winter of 2024 saw the next highest subprime delinquency rates.
- Prime borrower scores are faring better than subprime, with 0.39% 60-day delinquencies in January 2025, up from 0.35% in January 2024.
Threat level: “Subprime auto loans face a deteriorating outlook for 2025,” a Fitch report said.
Driving the news: Multiple factors have increased the cost of car ownership, per Cox Automotive executive analyst Erin Keating, Axios’ Joann Muller reports.
- Vehicle prices are higher, averaging just under $50,000, and high loan rates (over 9% for new cars and almost 14% on used cars) are translating to steep monthly payments.
- Plus, car insurance rates are up 19% year over year, while repair and maintenance costs have risen 33% since 2020.
State of play: Other metrics, like consumer confidence and credit card delinquencies, are showing warning signs, too.
- The number of credit card holders only making minimum payments rose to a 12-year high, per the Philadelphia Federal Reserve.
- In the third quarter of 2024, the number of 30-day delinquencies rose to 3.52%, which marked double the rate from the pandemic low in 2021.
Zoom in: Delinquencies typically increase in January and February after the holidays, Mike Girard, Fitch’s senior director for asset-backed securities in North America told Bloomberg.
- Low-income borrowers, though, will continue to be affected this year because of inflation and interest rates, he said.
Go deeper: America might have reached “peak truck”