Nov Auto Update: Bank Credit Stabilizes as Subprime Stress Shifts

This month’s update pairs FFIEC call report data, offering rare visibility into bank-held auto loans, with a detailed look at Subprime Auto, where borrower behavior continues to shape loss timing.

Quick Insights

FFIEC Auto Call Report: Early Signs of Stabilization

• Delinquencies plateauing: Bank-held auto delinquencies have remained largely unchanged over the past two years, even as ABS delinquencies rose materially.

• Historically slow Q3 deterioration: Q3 2025 posted the slowest third-quarter delinquency growth since 2014, a notable seasonal inflection.

• Stress concentrated in few institutions: Regional underperformance is driven by a small number of banks; excluding them, affected regions outperform national averages.

Subprime Auto: Losses Delayed as Underlying Stress Builds

• October relief partially held: November performance was mixed but materially better than the broad-based deterioration seen earlier in 2025.

• Impairments rising slower than seasonal norms: 30+ impairments increased just 7 bps MoM, despite setting new cycle highs.

• Borrower behavior delaying defaults: Cure rates collapsed while made-payment rates remained elevated, helping keep charge-offs below impairment trends even as loss severity surged past 55%.