Americans Missing Car Payments at Historical Rate

Americans are falling behind on their car payments at the highest rate in more than three decades, The Hill reported Saturday.

According to Fitch Ratings, 6.56% of subprime auto borrowers were at least 60 days past due on their loans in January — the highest level since the agency began tracking the data in 1994. The trend reflects growing financial strain as consumers struggle to keep pace with inflation's strain on the economy.

Fitch Ratings's report was echoed by another from the Federal Reserve Bank of New York, which found Americans are falling behind on their car payments. The report lays out that in the fourth quarter of 2024, 3% of all outstanding auto loans were at least 90 days past due, the highest serious delinquency rate since 2010.

"Higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers across the income and credit score spectrum," the New York Fed wrote.

Meanwhile, the cost of purchasing a new vehicle has climbed significantly in recent years. According to Cox Automotive, the average price of a new car has risen from approximately $38,000 in January 2020 to more than $48,500 in January 2025, an increase of over $10,000. In the midst of the Biden administration, financing costs surged, with the average monthly payment for a new car loan reaching $795 in December 2022. By January, average monthly financing costs dipped to $755. However, they still remain high above the $566 monthly payment in 2019.

President Donald Trump's tariffs on auto imports for Canada and Mexico, which include a 25% levy on vehicles and parts, went into effect on Tuesday.

Bloomberg reported that the tariffs could raise car prices by as much as $12,000. But in response to widespread concerns, on Wednesday, Trump — at the behest of the "Big 3" U.S. automakers, Ford, General Motors, and Stellantis, the makers of Jeep and Chrysler — granted a one-month exemption for auto imports from Mexico and Canada.

Those with credit scores of 640 or less, according to Fitch, are considered subprime borrowers. They are struggling the most. However, there has also been a slight uptick in delinquencies among prime borrowers. In January, 0.39% of prime borrowers were at least 60 days late on their auto loans, up slightly from 0.35% the previous year.

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