Total auto loan debt is $1.68 trillion. Subprime 60-day delinquencies hit 6.9 percent in January, the worst in over three decades. Nearly a third of trade-ins are underwater. Banks are expanding credit while captive lenders and credit unions are pulling back. The buyers getting loans right now are being approved by institutions with less skin in the game and more appetite for risk.

The customer sitting across from me who just got approved at 8.4 percent on a 78-month term knows something is wrong. They feel it. They are not celebrating the approval. They are doing math in their head and hoping it holds. Three years ago that same customer bought at 4.1 percent on a 60-month term and walked out feeling good. Today they walk out quiet. That shift in how customers feel about their purchase is not in any of the industry data. It shows up six months later in owner loyalty scores and service retention and it is going to show up in portfolio quality at the lenders before this cycle is done.

If subprime delinquencies are already at 30-year highs and banks are still expanding credit, that tells you the lenders have already priced the risk into their portfolios and are comfortable carrying it. The problem is not that credit is too available. The problem is that vehicle prices are structurally disconnected from what a normal income can sustain without a 7-year loan. Credit availability did not cause that. MSRP inflation and tariff-driven pricing did.

People are treating vehicles like houses, but cars don't appreciate. It’s pure insanity to lock into these long-term burdens for something that loses value the second you pull out of the lot. We’ve completely lost our collective minds just to keep up appearances in the neighborhood.

Cash-flow underwriting could become a meaningful test of the argument in this thread. Dealertrack is integrating technology that can verify income using near-real-time financial information, and Westlake is adding it to its indirect lending process. A credit score tells you whether someone historically paid debt. Cash flow can potentially tell you whether the proposed payment actually fits today. Could better underwriting finally separate “qualified for the loan” from “can sustainably afford the vehicle”?

Imagine the disaster when mechanical failures hit. These lengthy durations mean warranties expire while balances remain massive. If a transmission dies late in the contract, owners will be stuck paying for a driveway ornament. We are ignoring the looming crisis of repair costs on aging, over-leveraged liabilities.

Automakers are cannibalizing their future growth. By pushing excessive loan durations, they are effectively locking consumers out of the market for the next decade. This short-sightedness ensures a massive sales drought once the current pool of buyers is fully saturated with inescapable long-term contracts.

September's Dealertrack data brings this debate back into focus. Approval rates reached 73.9%, approved subprime participation increased to 17.4%, and a record 31.8% of loans carried terms longer than 72 months.

Easier approvals can help legitimate buyers access transportation, but longer terms create additional exposure to negative equity and repairs after warranty expiration.

Should dealerships and lenders begin evaluating loan sustainability against expected vehicle life and repair costs instead of looking primarily at whether the monthly payment fits?

The risk isn't simply a default. It is a customer who cannot afford to repair the vehicle they still owe money on.

This crisis is paving the way for the total corporatization of personal mobility. As individual financing becomes mathematically impossible for most, we will see a permanent shift toward subscription-based transportation models. The days of the average person actually owning their car are effectively over.