US Auto Loan Performance: Historical Releases

Developments

September 2023

Auto loan performance was mixed in September as delinquencies increased but defaults declined. Loans delinquent for 60 days or more increased for the fifth month in a row and were up 13.3% from a year ago.

• In September, 1.89% of auto loans were severely delinquent. That was up from August’s 1.85% rate and was the highest September rate dating back to at least 2006.
• 7.38% of subprime loans were severely delinquent. That was an increase for the month from 7.17% in August and was the highest rate for any month dating back to at least 2006. The subprime severe delinquency rate was 72 basis points higher than a year ago, while the aggregate was 16 BPs higher.
• Defaults of auto loans declined by 9.8% in total in September from August but were up 31.7% from a year ago. Defaults of subprime auto loans declined by 11% but were up 18% from last year.
• During the summer, credit access was made more accessible across all channels and lender types. The All-Loans Index showed an increase of 0.2% to 97.1 in September. This means that access is now tighter by 5.9% year over year. Compared to February 2020, access is tighter by 2.1%.
• Movement in credit availability factors was mixed in September. Approval rates increased, subprime share increased, negative equity share increased, down payments declined, and those moves improved consumer credit access. However, average terms lengthened, yield spreads widened, and those moves hurt consumer credit access.

June 2023

• Delinquencies that were 60 days or more increased in June for the second consecutive month and were up 18.7% from a year ago. In June, 1.74% of auto loans were severely delinquent. That was up from May’s 1.68% rate and was the highest June rate dating back to at least 2006.
• 6.76% of subprime loans were severely delinquent. That was an increase for the month from 6.48% in May and was the highest June rate dating back to at least 2006.
• Defaults declined in June. Defaults of auto loans fell by 0.4% in total in June from May but were up 40.6% from a year ago. Defaults of subprime auto loans declined by 2.0% but were up 28.5% from a year ago.
• The All-Loans Index increased 0.8% to 97.2 in June, which was the highest reading since March and reflected that auto credit was easier to get than in April and May. With the increase in June, access was tighter by 7.1% year over year, and compared to February 2020, access was tighter by 2.0%.
• The rejection rate for auto loans exceeded the application rate for the first time since the NY FED survey began in 2013 the rejection rate. Auto credit rejection has reached new series high in the NY Fed survey at 14.2 percent from 9.1 percent in February. The probability that a loan application will be rejected rose to 30.7 percent for auto loans.

March 2023

Auto loan performance improved in March as a typical seasonal improvement in delinquencies and defaults was delivered by tax refund

• Loans that were 60 days or more delinquent declined in March for the first time in 11 months but were up 17.9% from a year ago.
• In March, 1.75% of auto loans were severely delinquent. That was down from February’s 1.90% rate but was the highest March rate dating back to at least 2006.
• Of subprime loans, 6.75% were severely delinquent, down from 7.34% in February. Even so, that was the highest March severe delinquency rate dating back to at least 2006.
• Defaults of auto loans fell by 7.5% in total in March from February but were up 12.3% from a year ago. Defaults of subprime auto loans declined by 10.8% but were up 4.8% from last year.
• Auto credit loosened by 0.2% as the approval rate improved and the subprime share increased. However, rates increased, and terms shortened.

December 2022

• Access to auto credit tightened again in December, according to the Dealertrack Credit Availability Index for all types of auto loans. The All-Loans Index declined 2.1% to 99.1 in December. The decline in access reflected conditions that were tightest since September 2021.
• Auto loan performance in December saw further deterioration. Loans delinquent by more than 60 days increased by 5.3% and were up 26.7% from a year ago. Of all loans, 1.84% were severely delinquent, which was an increase from 1.74% in November and the highest rate since February 2009.
• 7.11% of subprime loans were delinquent in December, up from 6.75% the previous month. The delinquency rate was 163 points higher than December of the previous year, and highest since 2006.
• The Default rate for December was 2.56%, lower than 2.98% in December 2019. The rate for 2022 was 2.28%, up from 1.98% last year but still lower than 2.90% in 2019.