Overall auto loan originations increased in the first quarter of the year by 1.3%, but among super prime buyers, there was a drop-off of nearly 3% year over year.
Driving the news: TransUnion’s Q2 2026 Auto Credit Industry Insights Report, including origination data for the first quarter, noted a drop in buyers at the top end of the credit tier.
While down 2.8% in originations, the super-prime buyers still made up nearly half of consumers at 107 million.
In the below-prime tiers, conversely, consumers accounted for 69 million originations, though subprime saw a 7.5% rise and near-prime 4.1% in the first quarter.
Satyan Merchant, SVP, automotive and mortgage business leader at TransUnion, pointed out the softening demand among the top tier is after year-over-year gains of 10% or more in 2024 and 2025.
“My take is that the super-prime segment, and even the prime-plus segment, if you go back seven, eight quarters, these were the two segments that had the highest year-over-year growth,” Merchant said. “To me, what that illustrates is over the last two years, the super-prime segment and especially of new vehicles, were carrying a lot of the auto market… Where we are today, I would say I think just that demand is finally exhausted.”
Zooming in: While originations increased by 1.3% to the start of the year, with 6.4 million in total, the pace remains more than 4% behind 2019, though pre-pandemic starts are hardly the true benchmark these days.
New-vehicle registrations are down 5.7%.
And used-vehicle registrations saw a small decrease of just under 1%.
Merchant pointed back to the growth in the lower-risk tiers driving more used sales.
Changes in lending: Among new vehicle purchases, captive financing dropped 1% to 43% and remains the leader in the market.
In the used space, banks and credit unions saw a drop in their share of the market.
Independent financing gained 2% on new and used sales, and among used sales has moved 10% since 2019.
“Independent lending is the area we’re seeing a little growth in,” Merchant said. “It’s the largest share they’ve had, and up to 28% is remarkable. They were under one-fifth seven years ago.”
Delinquencies remain stable: Merchant also pointed out that the delinquency rate, despite challenges with higher prices and interest rates, has remained within two basis points. He credited lenders and dealers with working together to fit customers into the right loan.
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Takeaway for dealers: Over the second half of the year, Merchant said there could be a drop-off in the comparison of originations from 2025 as there was a Q3 surge in buying EVs before the expiration of the tax credit.
He also urged dealers to understand what consumers are in the market for now.
“Despite all the challenges, originations did grow year over year. The market still exists,” he said, adding that dealers “need to understand the consumer is changing and the vehicle purchase journey continues to evolve. That’s what understanding the identity of a consumer, knowing who that consumer is and what’s going on with them, is critically important.”
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