US EditionRecord number of subprime borrowers miss car loan payments in October, data shows
- In October, Fitch Ratings reported subprime auto borrowers 60+ days delinquent rose to 6.65%, the highest level on record since the early 1990s.
- Economic pressures such as high borrowing costs, rising living expenses and shrinking savings are squeezing household budgets, leaving subprime borrowers increasingly vulnerable.
- By the numbers, delinquencies rose from 6.50% in September and 6.23% a year earlier while prime borrowers' 60+ day rate held at 0.37%.
- Firms specializing in subprime lending have failed, with PrimaLend filing for bankruptcy last month and Tricolor in September, as credit deterioration could weigh on lenders and unsettle investors.
- Buy-Here-Pay-Here operators face strain as PrimaLend filed for bankruptcy last month and Tricolor’s failure affects low-income Hispanic communities in the Southwestern United States.
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Subprime Borrowers Default on Auto Loans in Record Numbers: Report
An increased willingness to lend to borrowers with less than perfect credit has lifted the market share for subprime auto lending, but it has also led to a record number of auto loans in default among subprime borrowers. Subprime borrowers have FICO credit scores in the range of 300–670 and VantageScore scores of 300–600. Subprime auto loans that were 60 or more days late hit an all-time high of 6.65 percent in October, Fitch Ratings reported on…
Record number of subprime borrowers miss car loan payments in October, data shows
The share of subprime borrowers at least 60 days behind on their auto loans rose to 6.65% in October, the highest level on record, according to Fitch Ratings data going back to the early 1990s.
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