Consumers strained by rising vehicle costs are stretching loans longer and falling behind at higher rates, according to Experian’s State of the Automotive Finance Market Report for the first quarter of 2026. The trends point to mounting pressure across the credit and collections pipeline.
Thirty-day delinquencies on auto loans and leases rose to 2% in Q1 2026 from 1.95% a year earlier, while 60-day delinquencies climbed to 0.86% from 0.83%. Both measures remain well above pre-2023 levels. Experian’s vintage analysis showed 60-day delinquency at 12 months on book rising again for 2025 originations, with subprime new-vehicle loans reaching 9.88%.
At the same time, financing is reaching deeper into the credit spectrum. Subprime borrowers made up 15.75% of total vehicle financing, up from 14.40% a year ago. The subprime share grew to 6.88% from 5.61% in new financing and to 20.60% from 19.36% in used.
“While consumers are benefiting from improved refinancing conditions, we’re also seeing broader financing accessibility emerge,” said Melinda Zabritski, Experian’s head of automotive financial insights, in a statement. “There continues to be increased momentum within the subprime segment as financing options expand.”
Affordability remains the throughline. The average new-vehicle loan amount rose $2,150 year-over-year to $43,925, lifting the average monthly payment to $770 from $748. Used loan amounts increased $785 to $27,070, with payments edging up to $531 from $523. To keep payments manageable, borrowers continued leaning on longer terms. The average new-vehicle loan term reached 69.48 months, and the share of new loans extending beyond six years climbed to roughly 35.6% from 30.8% a year ago.
Refinancing offered some relief. Consumers who refinanced trimmed about 2.2 percentage points off their rate, to an average 8.05% from 10.29%, cutting monthly payments by $81. Credit unions captured the largest share of refinance activity at 63.43%, up from 62.31%, and delivered the biggest payment reduction at $101, compared with $60 at banks.
By lender type, banks held 28.42% of total market share, followed by captives at 26.83% and credit unions at 20.09%. Banks and finance companies continued gaining ground across risk tiers, while captives, though still dominant in new financing, lost share year-over-year.
