Auto serious delinquencies rising

More U.S. borrowers are falling seriously behind on car payments: 5.2% of auto-loan balances were 90 or more days delinquent in the fourth quarter of 2025, the highest share since 2010. (newyorkfed.org) The Federal Reserve Bank of New York released that fourth-quarter report in February 2026 using anonymized Equifax credit-report data. The same report said auto-loan balances rose by $12 billion in the quarter to $1.66 trillion, with $181 billion in new auto loans and leases appearing on credit reports. (newyorkfed.org) The increase sits inside a broader rise in household stress. The New York Fed said 4.8% of all outstanding household debt was delinquent in some stage at the end of December 2025, up 0.3 percentage points from the prior quarter. (newyorkfed.org) Auto loans matter because they are a large part of consumer borrowing and because missed car payments can quickly threaten a borrower’s ability to get to work. Federal Reserve researchers wrote in September 2024 that auto loans account for about 25% of nonmortgage consumer credit. (federalreserve.gov) Federal Reserve researchers also found the recent rise in auto delinquencies was concentrated in loans originated since 2022. They said larger loan amounts at origination, more than higher interest rates alone, explained most of the increase in monthly payments tied to delinquency. (federalreserve.gov) That points back to the run-up in vehicle prices from mid-2020 to mid-2023, when buyers often financed more expensive cars with bigger monthly bills. The New York Fed’s fourth-quarter report also showed auto underwriting loosened slightly, with the median credit score on new auto loans falling to 716 from 724 in the prior quarter. (federalreserve.gov) (newyorkfed.org) The strain is not spread evenly. Philadelphia Federal Reserve researchers said subprime borrowers held 17% of active auto-loan accounts in the third quarter of 2025 but accounted for nearly two-thirds of delinquent loans. (philadelphiafed.org) Those researchers also argued the headline numbers may overstate how fast borrower distress is worsening right now. In an April 2026 report, they found the stock of severe delinquencies was rising even as the flow of newly delinquent loans was fairly stable, which can happen when troubled loans stay unresolved longer before charge-off or repossession. (philadelphiafed.org) The industry is making a similar case. The American Financial Services Association said on April 16, 2026 that auto delinquency rates were elevated but that early- and serious-delinquency transition rates had stabilized, and it cited longer workout periods rather than a fresh surge in distress. (afsaonline.org) The common ground is narrower than the argument suggests: delinquency rates are still high, monthly payments are still heavier than they were before the pandemic, and the borrowers missing payments are concentrated at the riskiest end of the market. The next New York Fed household debt report will show whether that 5.2% mark was a peak or another step up. (newyorkfed.org) (federalreserve.gov)