By Shawn Henry 
Subprime car buyers are hitting the skids, falling behind on payments faster than we’ve seen in 30 years—a red flag for an economy that’s starting to look shakier by the day. Once the last bill people would ditch, auto loans are now right up there with mortgages and maxed-out credit cards in the “financial doom” category.
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Numbers from Fitch Ratings paint a bleak picture: 6.43% of folks with credit scores in the gutter are two months late on their ride payments. That’s double the 2021 mess and worse than what we saw during the last few recessions. Repo men are busier than they’ve been since ’08, snatching wheels from folks barely making ends meet.
Blame sky-high sticker prices, brutal interest rates, and inflation that just won’t quit. Over half of new leases and 75% of auto loans now wring out $500+ a month, while nearly 20% hit a grand. Even clunkers aren’t cheap anymore, with almost half of used-car owners coughing up $500 monthly just to keep rolling.
And here’s the kicker: fixing and insuring those rides is getting stupid expensive. Repair bills shot up 15% this year—the steepest jump since 2021—while insurance costs are still outpacing inflation like some runaway train.
Subprime borrowers? They’re getting crushed. Many owe more than their jalopy is worth while drowning in other debts. September defaults hovered near 10%, per Cox Automotive, dipping slightly from 2022 but still way above “normal.”
Meanwhile, folks with good credit? Barely a scratch. Their late payments sit under 0.5%, proving once again this “K-shaped” economy isn’t just theory—it’s a grim reality where the well-off cruise smooth while the working class white-knuckles it just to keep the car that gets them to their job.