President Donald Trump has been telling Americans that “inflation has been defeated,” a rosy claim he has repeated in recent weeks, even as the latest numbers show price pressures are still biting. “Inflation has been defeated,” he said while touting rate cuts and a supposedly improving outlook, yet consumer prices rose 2.9 percent in August, above the Federal Reserve’s target.
Away from the podium, the data is alarming in the auto finance market. The most car-dependent nation on earth is wobbling on its wheels. TransUnion reports that 60-plus-day auto delinquencies reached 1.38 percent in the first quarter of 2025, surpassing the 1.33 percent peak seen in 2009, a grim throwback to the Great Recession. Repossessions have followed suit, with roughly 1.73 million vehicles seized in 2024, the highest tally since 2009, a 16 percent jump from 2023.
“Auto loan delinquencies have reached alarming levels, with overall 60-plus-day delinquency rates at 1.38 percent in Q1 2025, exceeding the 1.33 percent peak in 2009, and subprime delinquencies hitting a record 6.6 percent,” said Ignas Ryla of Ovoko, warning that 1.73 million repos last year and $1.66 trillion in auto debt echo pre-crash patterns. He added that the collapses of Tricolor and First Brands exposed fraud and reckless lending, potentially sticking banks with hundreds of millions in losses.
Carl Hazeley of Finimize called it the kind of shock that cascades through households. “Car finance defaults are worth watching closely. Auto loan delinquencies are approaching Great Recession levels,” he said, noting the human spiral that starts when a family loses a car, then a job, then access to school or health care. Americans are being rejected for auto loans at the highest rates since 2013, with expected rejection rates at 33.5 percent.
The average new car price finally broke the $50,000 barrier in September, a record that collides with higher interest costs to produce four-figure car notes that strain paychecks. It’s little wonder that borrowers are falling behind even as they try to keep life moving, especially younger drivers who face the steepest delinquency rates, as Ryla noted.
Tricolor’s rapid bankruptcy, which followed alleged fraud tied to an asset-backed loan, has already left Fifth Third and JPMorgan nursing sizable hits, while the implosion of auto parts giant First Brands has ricocheted through funds and credit desks. The point is not that one or two bad actors tank an economy, it’s that stress in auto finance is now surfacing alongside corporate credit shocks in adjacent corners of the market.
All of this is colliding with a government shutdown that threatens to wreck the holidays. Retailers are warning that a prolonged stoppage could dent consumer confidence during peak season, and food benefits for tens of millions could be at risk if the shutdown drags into November — a one-two punch for families already juggling car notes and rising costs.
The White House has floated and at times walked back triple-digit tariffs on Chinese goods, with another high-stakes meeting between Trump and Xi Jinping expected on the sidelines of the APEC summit in South Korea. Tariffs have already been flagged by analysts as inflationary, meaning higher prices that only make those car payments harder to meet.
Experts are not saying a 2008 rerun is guaranteed, but the signals are familiar: rising delinquencies, a spike in repossessions, fragility in parts of consumer and corporate credit, and policy choices that could pour fuel on the fire. If you want a simple test for whether the economy has truly “defeated” inflation or is cruising toward a larger crisis, watch the cars. When Americans can’t keep them, the rest of the story tends to write itself.
