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Early-stage auto delinquencies are climbing: 30-day past-due rates rose to 2.13% in June, the biggest jump of any group, even as 90+ day rates stayed flat.
Auto finance-focused companies are seeing delinquencies rise first: Their 30-day delinquency rate is 3.05% vs. banks at 1.19%. Subprime-heavy approvals are boosting volume but lifting late payments.
Deal discipline is keeping profits steady: Market-fit inventory and tighter structures are helping dealers avoid the higher-risk units that turn into missed payments, repossessions, and charge-offs after 90 days.
(Data source: CDG analysis / Moody’s Analytics Data)
Early-stage auto delinquencies are rising, but 90+ day rates are holding steady.
June data shows overall auto delinquencies aren’t moving much year-over-year, but early-stage late payments are creeping up, according to monthly data obtained via Moody’s Analytics.
Here’s the breakdown by bucket (30, 60, 90, 120 days) as a share of total delinquent payments:
CDG analysis via Joe Cecala
Mike Brisson, director of economic research at Moody’s, points to two likely reasons for the rise in 60+ day DQ payments:
Buyers who rushed pre-tariff purchases before they were financially ready.
Student loan payments that restarted in May.
WHY IT MATTERS:
Early-stage delinquency creep means some lenders could tighten underwriting or adjust buy rates before year-end.
Dealers who rely heavily on those lenders for volume should start diversifying their lender mix now to avoid a sudden slowdown in approvals.
Banks are keeping delinquency rates low, while finance companies are seeing them rise.
In June, bank loans (traditional lender) posted a 30-day past-due rate of 1.19% and a 120+ day rate of 0.16%, both slightly better than earlier this year.
Meanwhile, auto finance-focused companies (captives, independents, subprime specialists) came in higher: 30-day at 3.05% and 120+ day at 0.66%, with both rates climbing in recent months.
CDG analysis via Joe Cecala
Super common late in the credit cycle, according to Brisson, because finance companies loosen credit faster, boosting approvals but increasing delinquency risk sooner, while banks and credit unions adjust more slowly and keep past-due rates lower.
WHY IT MATTERS:
The deals holding up best right now tend to be mid-priced SUVs like the Escape, Equinox, and Grand Cherokee, because they’re cheap to keep, easy to structure under $450 a month, and can be paired with F&I coverage that keeps a $1,500 repair from wrecking the buyer’s budget.
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Early-stage delinquencies are moving higher, which means deal discipline matters more.
Here’s how Shane Wood, GM at Bruce Titus Port Orchard Ford, is keeping approvals clean and payments manageable in his market. Plus, where the lessons can apply anywhere.
Do: Double down on high-leverage programs
In Wood’s market, that’s leasing, especially for EVs. Two top Ford dealers in his region just hit 30% lease penetration, delivering competitive payments and lower approval risk.
“The dealers who are still breaking records are selling the most EVs and are taking full advantage of leasing.”
Shane Wood
Do: Treat trades like gold.
If payment, insurance, and taxes sink a deal, he says it’s worth retailing high-mile or “edgy” units that would’ve been wholesaled in the past. His team does this, and has buyers sign a disclaimer spelling out the car’s issues to keep the process transparent.
Do: Know your market’s sweet spot.
In Wood’s market, Mavericks, Bronco Sports, STX F-150 leases, and sub-$20K used units move fastest when every salesperson can speak confidently on the payment, term, rate, and offers for each, on the spot.
“It’s a much better customer experience when you deal with people who know what they are talking about,” he said.
Don’t: Let headline noise pull focus from the store.
Instead, focus on tightening the basics. Like getting that 3-hour internet response down to just minutes, and ensuring follow-ups give unsold shoppers a reason to reply.
Don’t: Ignore captive programs.
Even in a credit-union-heavy market, Wood says skipping OEM programs like Flex Buy or lease specials can cost deals. His team avoided them in the past, thinking they’d cut gross, but found the real loss came from missed sales.
If the spring pull-ahead rush and student loan bills did push more buyers into the 30- and 60-day DQ territory. Expect the EV lease scramble before Sept. 1, when federal credits start phasing out, to do the same.
That makes now the best time to push for payments buyers can still make after 90 days, even if that means passing on high-risk deals that are more likely to end in missed payments, repossessions, and charge-offs.
Missed yesterday’s episode of Daily Dealer Live?
Presented by:
Frankman Motor Company on Call Tracking Tech
Featured guests:
Cole Frankman, Dealer Principal/Owner of Frankman Motor Company
