Subprime auto loan delinquency rates have surged to their worst levels in over three decades, raising serious concerns across the auto-lending industry.
The 60-day delinquency rate climbed to a historical high at the start of 2026, sitting at approximately 6.8%, surpassing levels recorded during the Great Recession.
This alarming trend has already claimed several victims in the subprime auto lending space over recent years, with more potential casualties on the horizon.
Subprime lenders American Car Center and U.S. Auto Sales both ran into serious financial trouble back in 2023, signaling early cracks in the sector.
In 2025, Tricolor Holdings also hit the skids, though fraud accusations meant additional factors were contributing to its difficulties beyond simple credit deterioration.
By mid-2026, America’s Car-Mart (NASDAQ: CRMT) was forced to work directly with its lenders in a bid to ensure its own survival.
Investors holding positions in OneMain Holdings (NYSE: OMF) and Credit Acceptance (NASDAQ: CACC) need to pay particularly close attention to the worsening credit environment these companies face.
OneMain Holdings reported a 30-day delinquency rate of 5.37% in the first quarter of 2026, down from 5.85% in the December quarter but still up from the prior year’s 5.16%.
Charge-offs at OneMain also worsened, rising from 7.83% to 8.02% year over year, suggesting the company’s credit quality continues to drift in the wrong direction.
Credit Acceptance’s first quarter 2026 update revealed that loans made between 2021 and 2024 have been underperforming expectations, with even 2026 loans failing to meet targets.
Capital One Financial (NYSE: COF) offers a notable contrast, working with lower-credit-quality customers while maintaining a more stringent approach to its lending decisions.
Capital One’s combined 30-day delinquency rate across credit cards and auto loans stood at 3.24%, down from 3.59% in the December quarter and 3.51% in the same period of 2025.
Its auto loan-specific 30-day delinquency rate came in at 4.21%, representing a significant improvement from 5.23% in the fourth quarter of 2025 and 4.93% a year earlier.
This improving trajectory at Capital One stands in stark contrast to the deteriorating metrics being reported by more aggressively positioned subprime lenders in the same period.
For investors drawn to this sector by the appeal of high interest rates charged to borrowers, Capital One represents a way to gain exposure without taking on the highest-risk end of the market.
It is also worth noting that delinquency rates among higher-credit-quality auto loan borrowers remain near historically low levels, highlighting just how concentrated the stress currently is in subprime lending.
The subprime auto lending space has a long history of spectacular profits during economic expansions followed by severe pain when conditions soften, even without a full recession taking hold.
Investors considering any position in auto lending businesses should weigh the current delinquency data carefully before committing capital to the sector’s riskier corners.
