Late Car Payments Hit Highest Rate in More Than 30 Years

American consumers are missing monthly car payments at the highest rate since 1994.

The share of subprime auto borrowers who were at least 60 days delinquent on their payments climbed to 6.56% in January, Bloomberg News reported Thursday (March 6), citing data from Fitch Ratings. That figure is the highest since data collection began, the report said.

“The lower income level has been really affected, and we expect that to continue to be the case this year,” said Mike Girard, senior director for asset-backed securities in North America for Fitch. “There’s still the continued impact from higher inflation and interest rates.”

He added that late payments tend to climb in January and February in the wake of the holiday shopping season, followed by a recovery in March and April as borrowers get their tax refunds.

According to Bloomberg, Fitch defines subprime auto borrowers as people with credit scores of 640 or lower. Borrowers with higher scores are doing better, with 0.39% of prime borrowers were at least 60 days past due in January, compared to 0.35% in January 2024.

The report follows recent Federal Reserve Bank of New York data showing that the number of car loans that had sunk into “serious” delinquency — meaning 90 days late or more — had reached 3% during the fourth quarter, the highest level in 14 years.

The same data showed an even starker situation for credit card delinquencies, with 11.35% of those loans more than 90 days late. That was a 2% increase from the previous quarter, and a 17% increase year over year.

“We haven’t seen these levels of delinquency in years — and in fact, not since the fourth quarter of 2011,” PYMNTS wrote at the time.

These numbers come amid other warning signs for Americans’ financial health, such as declining consumer confidence.

“There’s a lot of uncertainty in the market,” QED Investors’ Amias Gerety told PYMNTS Karen Webster earlier this week. “Consumers are still spending, but you can see hesitancy creeping in, especially when it comes to big-ticket purchases.”

Also this week, the latest edition of the Federal Reserve Beige Book underscored feelings of uncertainty — a word that appears 34 times in the publication — amid mounting worries about tariffs and a dip in consumer spending.

“The trade war and tariff situation is fluid, but the central bank’s sources are already pivoting, which means that the pressure on consumers may only deepen,” PYMNTS wrote. “At the moment, businesses are grappling with the costs of doing business, and the pass through, to consumers, seems just on the horizon.”