With concern about vehicle loan delinquencies and repossessions at a high level in some corners of Capitol Hill, the latest edition of the Federal Reserve Bank of New York’s Household Debt and Credit Report sheds some new light on the state of the automotive finance market. While there is data of concern, the outlook may be better long-term.
The report, compiled from the New York Fed Consumer Credit Panel, an anonymized sample of credit records drawn from Equifax data, shows that 5.2 percent of the dollar value of all auto loan balances were 90 or more days delinquent in the fourth quarter of 2025. This was an increase from 5 percent in the previous quarter and was the highest share of seriously delinquent balances on record since 2010.
The reasons are well understood. A sharp rise in inflation and interest rates, coupled with pandemic-era supply chain snarls and abundant fiscal stimulus, have left a segment of consumers with loans they are having difficulty paying back in the current environment of reduced employment and income growth.
The good news is that other indicators of credit performance suggest the situation is stabilizing and even improving in some respects. The New York Fed report shows that the percentage of balances transitioning into 30-day delinquency fell to 7.7 percent in the fourth quarter of last year, inching downward from 7.6 percent in the third quarter. More importantly, the rate of transition to early delinquency has fallen for five consecutive quarters as of the end of last year.
At the same time, the percentage of balances transitioning to 90-day delinquency held steady at 3 percent in the fourth quarter. Following a period of increase in 2022 and 2023, transition to serious delinquency has been effectively flat for nearly two years now and stands well below rates recorded in the aftermath of the financial crisis of 2008.
Although affordability issues and household budgetary distress remain top-of-mind, the data bodes well for the near future. Indeed, when surveyed in January, AFSA members offering vehicle finance expect on balance that loan performance will improve in the first half of 2026.
Perspective on Auto Loan Performance
Feb 25, 2026
With concern about vehicle loan delinquencies and repossessions at a high level in some corners of Capitol Hill, the latest edition of the Federal Reserve Bank of New York’s Household Debt and Credit Report sheds some new light on the state … Read the rest
AFSA Backs Rate Cap Boost
Feb 19, 2026
Last week, AFSA’s State Government Affairs team submitted a comment letter in support for WV SB 702.
SB 702 is an important step toward modernizing West Virginia’s consumer credit laws by replacing an outdated tiered rate structure… Read the rest
Another Rate Cap Bill
Feb 19, 2026
U.S. Sens. Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), Jack Reed (D-RI), and Jeff Merkeley (D-OR) introduced legislationthat would grant states the ability to limit consumer loan interest rates. The Empowering States’ … Read the rest
AFSA Engaged on Vehicle Finance Interest Tax Deduction
Feb 19, 2026
AFSA continues to work on issues relating to the implementation of the 2025 vehicle finance interest tax deduction. The deduction was part of the 2025 reconciliation package, and was designed to “deliver on presidential priorities to provide… Read the rest
The CFPB’s Exorbitant Price Tag
Feb 19, 2026
Needlessly burdensome and even antagonistic regulation is often cited as a source of inefficiency, driving up costs for the consumer finance industry and ultimately for consumers.
A new report from the Council of Economic Advisors (CEA)… Read the rest
New Date | AFSA Webinar | From Risk to Vehicle Recovery: One Connected Ecosystem
Feb 18, 2026
From Risk to Vehicle Recovery: One Connected Ecosystem
Thursday, May 7, 2026 at 2:00 p.m. ET
Auto lenders are navigating rising delinquencies, increased charge-offs, and greater pressure to recover assets faster while maintaining compliance.… Read the rest
THIS THURSDAY | AFSA Webinar | The Future of Auto Finance Payments: Trends, Challenges, and What Lenders Can Do to Get Ahead
Feb 17, 2026
AFSA Webinar | The Future of Auto Finance Payments: Trends, Challenges, and What Lenders Can Do to Get Ahead
Thursday, February 19 at 2:00 p.m. ET
Auto finance is changing fast—driven by shifting borrower expectations, economic pressure … Read the rest
Industry Expertise | Auto finance’s first line of defense: Raising the standard in integrated software partnerships and data strategy
Feb 17, 2026
“Industry Expertise” is sponsored content produced by AFSA’s Business Partners’ to provide thought leadership and best practices for AFSA member companies. For more information about this sponsored content opportunity, contact Dan … Read the rest
Setting the Repossessions Record Straight
Feb 16, 2026
Perhaps it’s a happy coincidence that Sen. Elizabeth Warren’s staff requested that AFSA submit its response letter regarding vehicle repossessions on Presidents Day.
After all, from Alexander Hamilton’s push to establish national… Read the rest
Repo Error Remedies
Feb 12, 2026
On February 5, Senator Elizabeth Warren announced she had “launched a probe” regarding “harmful anti-consumer practices as auto repossessions skyrocket to levels not seen since the 2008 financial crisis.” In a letter received by AFSA,… Read the rest