Subprime Delinquencies Hit 11-Year High

Subprime auto loan delinquencies have recently climbed to their highest levels in roughly a decade-plus, signaling mounting stress among lower‑income borrowers but not (yet) a systemic credit event.

What “11‑Year High” Refers To

• Fitch Ratings has reported that delinquencies in US subprime auto asset‑backed securities (ABS) reached an 11‑year high in a recent September reading, implying the worst performance since the mid‑2010s for that data set.

• These are loans to higher‑risk borrowers that have been pooled and securitized, so the metric is narrower than “all auto loans” but is a key risk barometer for the subprime segment.

Current Levels

• By late 2025 and into early 2026, the 60‑plus‑day delinquency rate on subprime auto loans in ABS climbed to around 6.6–6.9%, the highest in data going back to the 1990s for that series.

• For context, this subprime serious‑delinquency rate is now above its peak during the 2008–09 financial crisis, even though the broader auto loan market’s overall delinquency rate remains far lower.

Drivers

• Vehicle prices remain elevated, with new‑car transaction prices still near record highs, pushing up monthly payments.

• Higher interest rates and rising insurance and living costs have squeezed budgets for lower‑income households, eroding their capacity to stay current on auto debt.

Broader Risk Signal

• The stress is concentrated in subprime auto and especially among smaller, more fragile specialty lenders; several subprime auto lenders have already entered bankruptcy or are under pressure.

• Analysts so far generally do not see this as a systemic risk on par with mortgage‑backed securities in 2008, but as an indicator of bifurcation in household finances and growing strain at the lower end of the credit spectrum.