Car loans have gone from the safest consumer credit products to among the riskiest over the last 15 years, as delinquencies rose more than 50%, driven by soaring car prices and rising interest rates.
Consumers across all income categories are struggling to make monthly car payments.
Auto loans were once a safe haven, with drivers prioritising payments on their transportation above other debts.
But delinquencies on car loans, defined as 60 days or more past due, jumped 51.5% from the first quarter of financial year 2010 (1Q10) through the 1Q25.
The study found that 1.6% of total auto loans were 60 days or more past due as of July 2025, while credit card and first mortgage loan delinquencies are less than 1%.
US consumers purchased about 16 million new cars last year, and the majority were financed.
There are close to 300 million cars on the road in America.
Interest rates on new car loans now top 9%, exacerbating an automotive affordability crisis.
“That’s a double whammy”. “You’ve been hit by the increased cost of the car and then the financing cost of the car.”
Source: Bloomberg
https://www.thestar.com.my/business/bus ... -from-2010
