8 November 2023
Subprime auto lending is in turmoil again, with its risky high-reward nature backfiring. Specialized lenders are facing bankruptcies as the market for securitizing these loans dries up. Delinquencies are spiking, and the aggressive tactics fueled by low yields are leading to investor losses, unraveling the precarious financial strategies in place. Despite being a fraction of auto lending, subprime’s troubles cast a shadow of instability over the industry.