Record High Subprime Auto Loan Delinquencies Signal Economic Strain in New York

Fitch Ratings has reported a record high delinquency rate for subprime auto loans in the U.S., reaching 6.65% in October 2025, the highest since 1994. Subprime loans, extended to higher-risk borrowers, are experiencing growing default rates, signaling increased financial stress among vulnerable consumers.

In New York State, the average car loan delinquency rate for 2025 stands at 4.55%, with Long Island showing lower rates compared to the statewide average but notable year-over-year increases across its congressional districts. For instance, Long Island's CD2 district has seen its delinquency rate rise to 4.26% in 2025 from 2.85% in 2017, while CD4's rate climbed to 3.56% from 2.27%, indicating a worsening trend of payment defaults. The two wealthier districts, CD3 and CD1, report the lowest delinquency rates but also exhibit upward trends. These rising car loan delinquencies coincide with New York's high and projected increasing auto insurance premiums, adding financial pressure on borrowers.

The growing number of missed car payments underscores broader affordability challenges, as families face competing demands from essentials such as food, healthcare, and housing. This situation reflects deeper economic strains influencing the insurance and lending markets, with implications for underwriting risk and claims management for auto insurers. Overall, the data points to a tightening financial environment that insurance professionals should monitor for its potential impact on risk assessment and policy structuring.