The New York Fed reports that 5.49% of everything Americans owe on their cars is now at least 90 days late in the second quarter of 2026. That is about $94 billion. In 2010, with almost one worker in ten out of a job, that share was lower. From April to June of 2026, unemployment averaged about 4.3%.
Those two numbers used to travel together. This time they split. Only one quarter in the New York Fed’s records, which start in 2003, was worse: the one right before it, at 5.60%.
The math, run forward:
A car loan is a fixed number due on a fixed day. Your other bills move; the payment does not. After you drive off the lot the car loses value faster than the loan shrinks, so for many borrowers there is a stretch, sometimes years, when they owe more than the car is worth. In that stretch, selling does not get you out.
Before you call it a record, check the ruler. The 5.60% counts every dollar already 90 days late, including loans that went late months ago. Counting only the new ones, the rate peaked at 3.48% in the second quarter of 2009 and was 3.00% in the second quarter of 2026. By that ruler, 2009 was worse. In early 2010 it was 3.10%, with unemployment at 9.8%. In September of 2026 it was 4.2%.
Who is falling behind: borrowers aged 18 to 29 went seriously delinquent at a rate of 4.84% over the past year, against 2.19% for people in their fifties. The fifties are the number that moved: it was 0.90% at the end of 2021.
By credit score, new 30-day delinquencies among borrowers who started below 620 reached 8.9% at the end of 2024, up from 7.2% in 2019. In the middle (680 to 719) they went from 1.1% to 2.0%. Above 760 they stayed at 0.2%.
By lender: 5.6% of balances at finance companies not owned by a carmaker went newly late in that quarter. At credit unions, 1.3%. The Federal Reserve put the average rate on a used car loan from a finance company at 15.9% in the second quarter of 2026, up from 13.5% in 2021.
Who builds a loan like that, in the open: America’s Car-Mart sells used cars and finances them itself. Its 10-K for the year ended April 2026 shows an average car at $20,064, gross profit of $7,442 per car (37.1% of the price), an average down payment of 5.1% and an average rate of 17.7%. It also shows a net loss of $139.2 million and net charge-offs of 27.6% of its average loan portfolio. The profit on the car is booked when the car is sold, before most payments are made.
What happens after: in January 2025 the Consumer Financial Protection Bureau published data from nine lenders. Of 905,000 repossessed cars in the dataset, 94% ended with a deficiency balance: money still owed after the car was sold. In December of 2022 the average was $11,340. How many cars are repossessed each year? Nobody knows. The bureau says the available data do not provide detailed information on repossessions.
The two numbers a borrower controls: run the Car-Mart math: $19,041 financed at 17.7% over 49 months is a payment of $548.53, with $7,836.87 in interest. With a 20% down payment instead of 5.1%, the payment drops to $462.39, which is $86.14 less every month. Or at 11.43%, the average Experian reports for a used car loan, it is $488.12 and the interest falls by $2,960. The limit: the borrower paying 17.7% is mostly the one who cannot get 11.43%, and refinancing only works while the loan is current.
Why it still matters: in the Fed’s latest household survey, 63% of adults said they would cover a surprise $400 expense with cash or its equivalent. For a borrower who started underwater, at a high rate, with almost nothing down, the break can be no bigger than that. From February to September the price of gasoline rose 45.5%. Car-Mart already blames fuel in its filing. The New York Fed has not. Its next report, in November, will show whether that spike reached the car loans.
A car is sold as freedom. On a loan that starts underwater, it can turn into the one bill that follows you after the car is gone.
Watch: What the Hell Is Really Happening to Car Loans, https://youtu.be/6JjDEGLsjxs
No advice here. No tips, no recommendations. Just the numbers, and where each one is published. The full source list is in the video description.
— The Cost of Living