US auto loan delinquencies and repossessions hit records in 2025 as $1.66 trillion debt weighs on borrowers

In 2025, U.S. auto loan delinquencies climbed to record levels, as borrowers struggled under $1.66 trillion in outstanding car debt and repossessions reached their highest point since the 2008 Great Recession. Although Federal Reserve rate cuts in September and October lowered average refinance rates from 8.35% in January to 7.62% in September, tighter credit standards have left many subprime borrowers unable to benefit. At the same time, the average new vehicle price rose to $48,699 in May, further pressuring households already paying historically high monthly car notes.