Car loan delinquencies are surging. Here's what to do if you're falling behind.

Core Insights - The auto loan delinquency rate among subprime borrowers has reached its highest level since 1994, with 6.65% of borrowers at least 60 days past due on their loans in October [1] - Auto loans have shifted from being one of the least risky consumer credit products to one of the most delinquent types of loans [2] - Delinquencies have been rising across all credit tiers and income groups, despite tightened lending criteria in the past three years [3] Economic Factors - The surge in car loan delinquencies is attributed to a combination of rising car prices, interest rates, and everyday living costs [4] - The average transaction price for a new vehicle surpassed $50,000 for the first time, reaching $50,080 in September [5] - The average interest rate for new car loans is currently 6.8%, while for used cars it is 11.54%, with subprime borrowers facing rates around 13.38% [5] Consumer Sentiment - A Capital One survey indicates that 56% of Americans are concerned about their financial future and managing living costs, which exacerbates the challenges for subprime borrowers [7] - The Consumer Price Index (CPI) rose by 3% year-over-year in September, indicating increasing costs for everyday goods [6] Implications of Delinquency - Falling behind on auto loan payments can lead to car repossession and significantly damage credit scores, affecting future loan eligibility [8][9]