Auto loan delinquencies have been high for some time, but the rate at which they were increasing has started to slow down, according to the Federal Reserve Bank of New York’s Household Debt and Credit Report for the first quarter of 2026 — and researchers take that as relatively good news.
In a May 12 conference call with reporters, New York Fed analysts said they are closely watching the so-called “flow,” the percentage of auto accounts that transition into delinquency in a given quarter, as the best indication of the current state of the auto finance market.
By that measure, auto loan flow into early delinquency, defined as at least 30 days delinquent, was 7.72% in the first quarter, down from 7.99% a year earlier. The auto loan flow into serious delinquency, defined as 90-plus days delinquent, was 2.97% in the first quarter of 2026, roughly even with 2.94% a year ago.
“We are seeing stabilization across credit cards and auto,” in terms of flow into delinquency, a New York Fed researcher said in the conference call.
Protocol for the New York Fed is not to quote individual analysts by name. The authors of the report are researchers Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw.
Auto loan delinquency begins to slow in 2026
Percent of balances newly entering delinquency (30 days or more) or serious delinquency (90 days or more).
The quarterly Household Debt and Credit Report is one of the market’s earliest, widely published, detailed looks at auto loans and leases originated in the quarter just ended. As such, it’s an indicator for both consumer demand, and lender willingness to lend.
“In aggregate, spending is holding up,” in the first quarter of 2026, a New York Fed researcher said in the call. Besides auto loans and leases, the report also examines originations, delinquencies, and other metrics around mortgages, home equity lines of credit, credit card debt, and student loans.
Total auto loans and leases originated in the first quarter were $182.1 billion, an increase of 10.4% versus the first quarter of 2025. That includes loans and leases for new and used vehicles.
In the K-shaped economy of haves and have-nots, the highest-rated category of auto loans and leases, defined as credit scores of 760 and above, also had the biggest share. Those high-end loans and leases accounted for 42.8% of all originations in the first quarter of 2026, up from 41.1% a year ago, the report said.
Meanwhile, loans to borrowers with subprime credit, defined as credit scores below 620, accounted for 15.6% of Q1 auto originations, roughly even with 15.5% a year earlier.
While the household credit environment is in decent shape overall, younger borrowers, and borrowers with lower credit scores, are struggling more — including some with credit scores above the cutoff for subprime, a New York Fed researcher said in the call.
“Payment struggles go beyond subprime,” the researcher said.
