New subprime entrants shape auto loan vintage comparisons

Credit expansion within the overall U.S. economy is shaping how auto loan vintages perform, with expected losses continuing to rise across challenged cohorts. More new and smaller originators catering to deeper subprime borrowers have entered the auto finance market since 2008, which has contributed to the shift in loan performance in recent years and complicates isolation of comparable trends, Mike Girard , senior director of asset-backed securities North America at Fitch Ratings , told Auto Finance News . Those lenders typically “have worse performance than the traditional, larger subprime players that existed [decades ago],” Girard said. “There's that disconnect between performance now compared to 2008.” Analysts generally view 2022 and 2023 as the weakest recent auto loan vintages, particularly among that enlarged pool of subprime asset-backed securitization (ABS) issuers . This is in part due to the market changing as well as pandemic-era stimulus and loan deferrals that artificially propped up FICO scores during that time. For example, expected cumulative net losses (ECNLs) across subprime lender American Credit Acceptance ’s 2022 and 2023 vintages were revised higher as of the May distribution date, which followed upward revisions in 2025, according to a June 2 auto loan ABS tracker report published by S&P Global . ECNLs on 2024 vintages, however, have largely remained stable or have been lowered. [caption id="attachment_58362208" align="alignnone" width="885"] (Data source/S&P Global)[/caption] For prime deals by other issuers, ECNLs have been lowered or remained flat for 2023 and 2024 vintages, according to the report. Performance improved across 2024 and 2025 cohorts as lenders began tightening underwriting standards, including loan-to-value ratios and minimum FICOs, in the second half of 2022 following weaker-than-expected performance in the years prior, Girard said. Vintage trends Delinquencies in 2024 vintages and first-half 2025 vintages have improved, Amy Martin , managing director and sector lead for United States ABS at S&P Global, said during a presentation at the Non-Prime Auto Financing Conference in Irving, Texas. That’s been achieved by lenders tightening underwriting standards since 2023, she said, noting that some issuers, including CarMax Auto Finance , carved lower-quality subprime loans into a separate tier. The 2023 vintage is experiencing “much higher losses” than 2016, the last vintage unaffected by the pandemic-era stimulus, Martin said. However, that deterioration is isolated among a few issuers — all of which have a high concentration of used-vehicle financing, she said. “When you drill down even further, we found that [those financiers] had increased the percentage of loans that had a [payment-to-income ratio] greater than 10%,” Martin said. Prime 2022 and 2023 vintages have similar stories, though they vary by lending platform, Fitch’s Girard said. Generally, they are performing worse, but some lenders in the category did not see a material increase in losses because of disciplined underwriting, he said. Subprime loan vintages went through more of a credit cycle in the last four years, he noted, as lenders more broadly loosened underwriting for that borrower category coming out of the pandemic. Subprime lending sees investors cashing out every four to six years, Jeff Morgan , CEO of Ameritrust Financial Technologies , told AFN . The Toronto-based fintech provides used-car leasing and auto finance solutions for lenders and dealers. “We had a big flex in the market during COVID, where we saw prices go through the roof because there were no cars being manufactured,” Morgan said. “If you wanted a car, you had to go get a used one; prices went up.” Evidence of that shows in post-pandemic loan vintages, where there is a higher chance of default by consumers underwater in vehicles they might have paid too much for, he said. Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 5-7 at Caesars Las Vegas. To learn more about the 2026 event and register for early-bird pricing through Aug. 21, visit <a id="menur11ag" class="fui-Link ___1q1shib f2hkw1w f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1s184ao f1mk8lai fnbmjn9 f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh fhgqx19 f1olyrje f1p93eir f1nev41a f1h8hb77 f1lqvz6u f10aw75t fsle3fq f17ae5zn" title="https://hubs.la/q03tvdb00" href="https://hubs.la/Q03tVDB00" target="_blank" rel="noreferrer noopener" aria-label="Link www.AutoFinance.live/AFS"> www.AutoFinance.live/AFS .

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