NEW YORK—Some 8.4% of borrowers with weak credit scores who took out auto loans in the first quarter of 2014 had missed payments by November, according to a Moody’s Analytics analysis of Equifax credit-reporting data for the Wall Street Journal.
Spurring auto sales back to almost pre-recession levels, lenders are steadily reaching deeper into credit scores and also extending terms, analysts have reported. Now borrowers who took out auto loans over the past year are missing payments at the highest level since the recession, according to a report in the Wall Street Journal.
“It’s clear that credit quality is eroding now, and pretty quickly,” Mark Zandi, chief economist at Moody’s Analytics, told the publication.
More than 2.6% of car loan borrowers who took out loans in the first quarter of last year had missed at least one monthly payment by November, the highest level of early loan trouble since 2008, when such delinquencies rose above 3%, according to the Wall Street Journal.
The uptick comes amid an increase in subprime auto loans, raising concerns that car buyers may have taken on more debt than they can handle.
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