Auto lenders tighten standards as nonprime, prime delinquencies up

Subprime auto lenders are tightening credit standards as delinquencies rise, in part from delayed calls to repossess vehicles or slower decisions to charge off loans. Irving, Texas-based subprime auto lender SameDay Auto Finance has tightened credit standards to focus on higher incomes as delinquencies rise, Chief Executive Russell Warden told Auto Finance News . He declined to provide SameDay’s portfolio size or auto originations. The biggest challenge SameDay faces “is having originations that meet our requirements, without changing those requirements to follow the market into higher [loan-to-value ratios] and older vehicles,” Warden said. The rate of auto loans more than 60 days delinquent rose 1 basis point (bps) year over year to 1.57% in the first quarter, according to an April 30 TransUnion report. Persistent affordability pressures “remain the primary driver of elevated delinquency rates,” Satyan Merchant , senior vice president of automotive and mortgage lending at TransUnion, told AFN . While the rate of auto loans more than 60 days past due rose in Q1, it increased at a slower rate YoY than in Q1 2025 and Q1 2024, according to TransUnion. [caption id="attachment_58361117" align="alignnone" width="1200"] (Courtesy/Canva)[/caption] The rate may be slowing as consumers face less inflationary pressure than in 2021 and 2022, Merchant said. Pandemic-era inflationary pressures made vehicle prices made it more difficult for consumers to afford to stay current on their loans. “Two years of positive real wage growth have helped consumers absorb the inflation increases of 2021 to 2022, slowing the pace of delinquency growth,” he said. Total auto loans also fell 1.1% YoY to 79.1 million in Q1, as originations dipped YoY, due in part to consumers buying vehicles in 2025 ahead of tariffs and the EV tax credit expiration, according to TransUnion. The data mirrors YoY declines in auto originations reported by Chase Auto , CarMax Auto Finance and GM Financial in Q1. Subprime delinquencies stagnant In subprime auto, loans are staying delinquent rather than being charged-off or vehicles being repossessed, causing the uptick in 60 day past due loans, Warden said. In 2019, roughly half of nonprime auto loans that became 60 days past due were new, meaning they were in the category for one month, he said, citing SEC asset-backed securitization filings. As of March, the amount of new loans in that category fell to 39%, he said. “This shift tells us that the 60-plus delinquency bucket is becoming more stagnant,” he said. “Instead of loans quickly moving through the pipeline to a charge-off, repossession or a full cure, they are lingering in a delinquent state for two, three, four months” [caption id="attachment_58361118" align="alignnone" width="2160"] (Courtesy/Russell Warden)[/caption] Meanwhile, nonprime auto net charge-offs have remained roughly flat, and the amount of 60 day past due loans made current have increased, Warden said, noting that the rise in cures “is not happening fast enough to offset the [delinquency] volume.” Additionally, the rise in monthly payments may make it more difficult for new auto borrowers to stay current on their loans, TransUnion’s Merchant said. The average new-vehicle monthly payment rose 4.2% YoY to $786, and the average used-vehicle monthly payment rose 2.9% YoY to $536, according to TransUnion. “Looking ahead, the key risk is a renewed acceleration in monthly payment growth that is likely outpacing real wage gains,” he said. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live .

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Auto lenders tighten standards as nonprime, prime delinquencies up

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