Car payments are usually the last to go because it’s how people get to work - yet subprime borrowers are skipping them in increasing numbers, according to Forbes:

They’re Skipping Car Payments; That’s The Final Warning Sign

The headlines say inflation is easing and jobs remain strong, but consumers are skipping car payments. The Fed claims to be data driven. But if you're watching behavior, not just backward-looking numbers, the signals are flashing red. Last month, I highlighted how mortgage delinquencies are rising fast. That piece resonated because it cut through the noise. By the time the official data confirms it, you're already late. Smart investors look where others aren’t looking yet.

Now we’re seeing it again, this time in auto loans. Delinquencies, especially among subprime borrowers, are spiking. This matters. People will skip everything else before they lose their car. That’s how they get to work. If they’re missing payments now, the strain is already severe. The Fed says it’s data-driven. But when consumers start skipping car payments, it’s no rounding error; it’s a flashing alarm. LendingTree reports 5.1% of Americans are now delinquent on auto loans, with 2% at least 30 days late and nearly 1% over 90 days late. That’s not just a trend; it’s a red flag.

This isn’t a macro panic call. It’s a window into structural pressure. The dislocation is real, and markets are still mispricing it. Timing matters.

apple.news: They’re Skipping Car Payments; That’s The Final Warning Sign

Data:

Subprime auto delinquencies have now surpassed 2009 levels, reaching a 15-year high, according to Fitch.

Experian shows that 30+ day delinquencies have jumped nearly 40% year-over-year in the lowest credit tier.

Even prime borrowers are falling behind. That alone tells you this isn’t confined to the fringe anymore.

The Fed reports auto loan balances have crossed $1.6 trillion, with average monthly payments hitting a record $750.

This isn’t just about subprime. The whole credit stack is starting to creak. Borrowers with decent credit are feeling it. Leasing costs have surged. Used car values are correcting. And loan-to-value ratios are upside down; borrowers owe more than the car is worth.