Earlier this year, reports came out indicating that car loan delinquency rates had hit record levels. They are as high today as they have been in 32 years, with previous levels of car loan defaults not having been seen since 1994.
These reports looked at subprime borrowers. They also considered those who were 60 or more days behind on making their payments, so they did not include people who had just accidentally missed a single payment. These were borrowers who were unable to pay.
A red flag for the economy
To some degree, this issue is about car loans specifically. For instance, the average monthly payment in 2026 is $774. It is much more than has been paid in previous decades, and it shows that owning a car is just getting more and more expensive.
But on top of that, many people look at these reports as a red flag for the overall American economy. It could indicate that bankruptcy filings will rise in the near future.
After all, many people are dependent on their cars and prioritize paying off car loans. They will miss other payments, such as credit card payments, before missing that car payment. So when you see the number of car loan delinquencies rise so substantially, it means many of those borrowers are also running into financial instability in other areas of their lives.
Your bankruptcy options
Have you found yourself facing high levels of debt and are unsure how to proceed? It may be time to look into your legal options, such as using bankruptcy to get a fresh financial start.
