Auto Loan Subprime Defaults Hit Crisis Levels

Subprime auto delinquencies are currently approaching crisis-era peak levels, bad news for finance providers and the wider consumer debt market according to a recent research booklet from the team at Morgan Stanley.

According to Morgan Stanley Research, across prime and subprime loan pools, 60+  day delinquencies are currently running at 0.54% and 4.51% respectively. The crisis-era peak for sub-prime auto delinquencies was 4.69%, and if delinquency rates continue to accelerate, they will pass this vital level before the end of the year. At the same time, default rates are also picking up. Morgan calculates the default rate for prime finance is currently 1.52%, far below the crisis peak of 3.5% but sub-prime defaults are currently running at 11.96%, only just...