Autos Mythbuster: Rear View Repos & the Road Ahead
Zachary Griffiths, CFA - Head of IG & Macro Strategy, CreditSights
Winnie Cisar - Global Head of Strategy, CreditSights
Peter Simon, CFA - Co-Head of U.S. Financials, CreditSights
Todd Duvick, CFA - Head of Autos, CreditSights
Jory M. Eisenberg, CFA, FRM - Senior Analyst, Special Situations
Will Lee - Analyst, Autos, CreditSights
17 November 2025
Insights into auto loan delinquencies and consumer credit, including:
- Subprime Auto Stress in Context: Understand how recent subprime lender bankruptcies and rising auto loan delinquencies relate to broader consumer credit trends, with bank data showing stabilization since late 2024 and improving metrics into 2025.
- Vintage Performance Analysis: Discover why weaker 2022-23 loan originations carry elevated loss content while more recent vintages show much improved performance, suggesting elevated repossessions may not signal broader consumer deterioration.
- Limited Systemic Risk Exposure: Learn how auto debt’s $1.66 trillion footprint (9% of household debt) is distributed, with banks holding only one-third and subprime exposures concentrated among specialty lenders and ABS rather than large financial institutions.
- Auto ABS Market Dynamics: Explore why Auto ABS spreads have widened versus long-term medians despite stable lender commentary, with AAA and AA-BBB tranches underperforming IG/MBS peers even as fundamentals improve.
- Vehicle Pricing and Affordability Outlook: Assess how new car prices (up ~3% YTD) face tariff-driven upside risks while used car prices normalize with returning off-lease supply, balanced against pressure from elevated repossessions and monthly payments near $750.
Executive Summary
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We contextualize the recent happenings in the auto and consumer finance markets, looking under the hood to assess the magnitude of stress in auto loans and whether recent blowups have systemic implications.
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Despite high-profile subprime lender bankruptcies and fraud headlines, macro and bank data indicate a bifurcated, but resilient consumer backdrop with stabilization in credit since late 2024 and improving metrics into 2025.
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Analysis of loan vintages at multiple lenders shows weaker 2022-23 originations carrying elevated loss content, but much improved performance for more recent loans. Management commentary from lenders (e.g. COF, ALLY) does not indicate any particularly divergent weakness in subprime for more recent vintages, ultimately leading us to question whether elevated repossessions should be viewed as a leading indicator for consumer credit generally.
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Auto debt totals $1.66 trillion (about 9% of household debt), with banks holding roughly one-third; exposures to subprime are concentrated among specialty lenders and ABS rather than large banks, limiting systemic risk.
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