The percentage of severe delinquencies, 90 days or more behind, on auto loans has remained stable around 3% for the past two years, but is still above 2019 levels as the amount financed has grown by nearly $12,000 in the past six years.
Driving the news: A report compiled by Morningstar shows severe delinquencies have settled at 3% at the end of the first quarter of 2026, nearly the same amount as at the close of 2024.
At the start of 2019, the 90-day delinquencies were at 2.4% and dropped to 1.6% in 2021.
The much shorter 30-day delinquencies have also stayed within 1% since 2024, ending Q1 2026 at 7.7%.
Mark Nolan, CFA, Vice President of Global Non-Bank Financial Institutions at Morningstar, told CDG News that the stabilization is partly due to the runoff of loans from 2022 and 2023, which had higher losses, as well as the subsequent tightening of underwriting scrutiny.
Zooming in: As the overall delinquency rates have remained stable over the past two years, the amount financed for a new vehicle purchase has grown from $39,918 at the start of 2025 to $42,503.
The amount financed has ballooned by 37.7% since 2019’s average amount of $30,865.
The used-vehicle financed amount is up 6.2% in the past year and 37.6% since 2019 to $24,897.
The new-vehicle finance rate has dropped from a peak of 6.4% in 2025 to 6.1%, whereas the used finance rate is down from 17.1% to 15.1%.
Shift to more prime buyers: In the past year, Morningstar noted that the financed amount held by consumers with credit scores of 760+ had the highest total at $78 billion.
Those consumers have added nearly $10 billion in auto loan originations in the past year, and as Nolan pointed out, many in that risk tier have been able to turn gains in the stock market into new vehicle purchases.
The subprime percentage (credit scores of 620 and below) has dropped to 15.6% of loans, totaling $28.4 billion.
Subprime buyers, meanwhile, made up 20.1% of the market in 2019, with $27.9 billion of originations.
What they’re saying: "Looking forward, we expect the credit performance of the captive auto finance companies that we cover to remain sound, reflecting their mostly prime credit quality customers,” Nolan said in a press release. “However, the credit performance of the independent lenders, most of which are subprime-focused auto-finance companies, should remain pressured, due to the inflationary stresses and affordability issues that are impacting their customer bases.”
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
Get insights trusted by 55,000+ car dealers. Free, fast, and built for automotive leaders.
Bottom line: Delinquencies have remained stable over the past two years, even as the total financing has escalated, with the breakdown of originations showing a shift to buyers with the best credit scores.
Morningstar did note a concern that a decline in demand may lead some lenders to loosen underwriting standards to grow originations.
He added, though, “it’s not something we’ve seen across the board yet.”
A quick word from our partner
The next idea that helps your dealership could come from a conversation in Detroit.
At Digital Dealer, you'll learn alongside dealership leaders from across the industry through practical sessions, hands-on Learning Labs, and valuable networking.
Explore new ideas, share experiences, and return with strategies you can put to work at your dealership.
September 22–23 | Huntington Place | Detroit
CDG readers save 25% — just use code CDG25OFF at checkout.
Bring your team for a generous discount.
