A growing number of U. The data also showed that U. These findings have raised questions about underwriting practices in the car loans sector. These observations mirror what happened in the run up to the financial crisiswhen unaffordable loans eventually triggered an unmanageably high default rate in the subprime mortgage sector. Last month, Ford F warned that it expects loan losses to spike following a rise in delinquencies and car repossessions.

As we mentioned last year, concerns over subprime auto delinquency rates may be one of the reasons why share prices in the likes of Ford and other car manufacturers are currently so low.

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Subprime Auto Delinquency Rates on the Rise. Used car dealers, such as CarMax KMXmight also come under pressure from rising delinquency rates, as could several of the banks that specialize in subprime auto lending.

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Auto Delinquency Rates Near Highs F, KMX By Daniel Liberto February 17, — kmx stock options Should We Be Concerned?

CarMax Could Stall as Risky Loans Rise - Barron's

Which Companies Are at Risk? Economists are increasingly concerned about the subprime loan industry. Fitch Ratings reports that delinquency rates for auto loans are nearing crisis level.

What's driving the surge of default? Subprime loans, of course. Many banks are easing out of subprime credit card debt while other financial institutions see opportunity. The delinquency rate on auto loans has increased every month since Kmx stock options, a sign that rising losses may be ahead.

JP Morgan Chase CEO Jamie Dimon issues a prescient warning over stress in the auto loan market to investors in New York. These loans can spell disaster for borrowers, but that doesn't mean they should be condemned. As the economy slowly heals, credit has become easier to obtain and interest rates have gone down.

But does that mean it's wise to take on a car loan right now? The more you understand about delinquency, the better prepared you'll be to handle it. March saw a significant drop in car sales in the United States. Automotive analysts are blaming banks.

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