Subprime Auto Delinquencies Just Hit Their Highest September Level Since 2017

If your car loan was approved at a lower score, you are in the exact group a new report is watching, and the numbers moved the wrong way again. The stress is not spread evenly across borrowers, and that is what makes this one worth your attention.

What happened

Credit and Collection News reported on a November 2 analysis by 24/7 Wall St. citing LoanTape research on subprime auto loan asset backed securities pools. Delinquency rates rose at 10 of the 12 issuers with at least $500 million in subprime balances. The report is careful about one point: these pools are not the entire US auto market, and after adjusting for pool age and mix, the underlying rise was smaller than the headline jump, but still real.

What this means for you

A 30 day auto late is reported to the bureaus, and a 60 day late puts the car itself at risk, because repossession usually follows continued missed payments. When delinquencies climb across most big subprime issuers at once, lenders tend to answer with tighter approvals, bigger down payments, and higher rates for the next borrower. If you are shopping at a lower score, the loan you qualify for six months from now may cost more than the one in front of you today.

What to do next

If your payment is slipping, call the lender before you hit 30 days late and ask about a due date change, a short deferment, or a modified payment plan, and confirm it in writing. If the rate is the problem and your score has improved since you bought the car, price a refinance and compare the total cost, not just the monthly payment. Never let the car go back voluntarily without understanding that a voluntary surrender still reports as a repossession.

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