Americans can't afford their cars any more and Wall Street is worried

Car loan delinquencies in the US have surged, with subprime borrowers facing record-high delinquency rates. The average price of new cars has risen significantly, leading to higher monthly payments that many Americans struggle to afford. Wall Street is concerned about the impact of these defaults on the $1.66tn car debt pile, particularly as subprime auto lenders face challenges. While the subprime auto ABS sector is smaller than the subprime mortgage sector that triggered the 2008 financial crisis, the stress in auto loans reflects broader consumer strain, especially if unemployment rises.