Automotive loans have gone from the most secure shopper credit score merchandise to among the many riskiest over the past 15 years as delinquencies rose greater than 50%, pushed by hovering automotive costs and rising rates of interest, a brand new examine exhibits.
Customers throughout all earnings classes are struggling to make month-to-month automotive funds, in response to VantageScore, a credit-scoring firm.
Auto loans had been as soon as a secure haven, with drivers prioritizing funds on their transportation above different money owed. However delinquencies on automotive loans, outlined as 60 days or extra late, jumped 51.5% from the primary quarter of 2010 via the primary quarter of 2025. The other is true for bank cards, private loans and most different types of shopper credit score.
The examine discovered that 1.6% of complete auto loans had been 60 days or extra late as of July 2025, whereas bank card and first mortgage mortgage delinquencies are lower than 1%. US customers bought about 16 million new vehicles final yr and the bulk had been financed. There are near 300 million vehicles on the highway in America.
VantageScore discovered that, in relative phrases, month-to-month automotive funds are growing quicker than mortgage funds.
“We’re seeing the price of vehicles and the price associated to automotive possession improve enormously,” Rikard Bandebo, VantageScore’s chief economist, mentioned in an interview. “Prior to now 5 years, it has elevated even quicker.”
Since 2019, new automotive costs have risen greater than 25% and now prime $50,000 on common, in response to researcher Cox Automotive. The common month-to-month cost on a brand new automotive was $767 within the third quarter, and one in 5 debtors pay greater than $1,000 a month, in response to automotive researcher Edmunds.com. Rates of interest on new automotive loans now prime 9%, exacerbating an automotive affordability disaster.
“That’s a double whammy,” Bandebo mentioned. “You’ve been hit by the elevated value of the automotive after which the financing value of the automotive.”
No earnings group is immune. Prime and near-prime debtors, who sometimes have good credit score scores, are literally lacking automotive funds at a quicker charge than subprime customers since lenders tightened financing standards for the lowest-rung debtors three years in the past, the examine discovered.
“The upper earnings you’ve, you are likely to no less than really feel you can personal a dearer automotive,” Bandebo mentioned.
The common auto mortgage stability has grown 57% since 2010, outpacing all different credit score merchandise, VantageScore discovered.
To get a extra inexpensive month-to-month cost, automotive consumers are stretching the size of loans to seven years or extra. That’s leaving an growing variety of customers “upside-down” on their loans, which means they owe greater than the automotive is price.
The pattern of lacking automotive funds is unlikely to reverse with American customers persevering with to purchase extra costly vans and sport-utility automobiles. Automakers are additionally providing fewer inexpensive fashions.
“Customers now are in a extra precarious place than they’ve been because the final recession,” Bandebo mentioned. “We’ve seen this rising pattern over the past a number of years of increasingly customers struggling to make ends meet, and it’s trying like that pattern goes to proceed into subsequent yr.”
