Why Americans Are Falling Behind on Auto Loans At Their Highest Level Ever

What It Covers

VantageScore's chief economist explains why auto loan delinquencies hit record highs, how wealth inequality drives divergent consumer outcomes, and why credit scoring models must evolve to capture 33 million previously unscored Americans.

Key Questions Answered

• •Credit Score Relativity: Credit scores measure relative risk, not absolute risk—a 720 score in 2017 represents different default probability than 720 in 2022 due to changing economic conditions, requiring lenders to adjust underwriting criteria beyond scores alone.
• •Wealth Over Income: Higher income households ($150k+) showed largest year-over-year delinquency increases in 2023-2024 because wealth cushions matter more than income—homeowners with equity weathered inflation better than high earners without assets, revealing true economic divide.
• •Auto Loan Crisis: Auto loans became riskiest consumer credit product in 2024 after being safest in 2010—average loan values grew faster than mortgages over 15 years, combined with insurance cost spikes creating unsustainable payment burdens.
• •Student Loan Impact: Student loan delinquencies doubled from 10% pre-COVID to over 20% after five-year forbearance ended—many borrowers never made payments before, and confusion over forgiveness programs created structural payment shock affecting millions of households.