These loans are often packaged into securities held by insurers and pension funds, exposing the retirement savings of millions to potential losses in a $1.7 trillion market. Subprime delinquencies are currently at their highest level since 1994, and total American car loan debt has reached $1.68 trillion. Financial analysts suggest that because drivers typically prioritize car payments above other debts, rising delinquency rates indicate that borrowers have exhausted all other options.
Tuesday, October 20, 2026
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Subprime Loans Over 12 Years Hit 30% and Risk $1.7T Market
US Markets16 hours ago
US car buyers are extending auto loan terms to up to 8 years to manage new car payments that now average $765 a month. More than 30% of subprime car loans issued this year will not be paid off until the vehicle is more than 12 years old, a sharp increase from 7% of such loans in 2019, according to Reuters. The discrepancy creates a risk where the debt remains constant while the vehicle rapidly loses value, leaving borrowers in negative equity.
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