Defaults on Subprime Car Loans at 22-Year High

May 16, 2018 at 1:34 AM

U.S. consumers with subprime auto loans are defaulting on payments at the highest rate since 1995, The Detroit News reports, citing Fitch Ratings.

The financial ratings service says the delinquency rate for loans to consumers with poor credit ratings rose to 5.8% in March. The rate, measured by payments that are more than 60 days past due, compares with only about 5% in 2008 during the financial crisis.

Financial institutions are responding by cutting back on subprime loans. Such contracts shrank in January by 10% year on year, according to credit reporting service Equifax. Leases to such applicants dropped 14%.