Auto loans and leases continue a trend toward prime-risk borrowers with the best credit and away from subprime accounts, according to the just-released Quarterly Report on Household Debt and Credit from the New York Federal Reserve.

The New York Fed reports auto originations in the first quarter of $165.6 billion, essentially flat vs. the first quarter of 2024. That includes loans and leases for new and used vehicles. Borrowers with credit scores of 760-plus are the only credit-score category that increases volume in the first quarter vs. a year ago. The New York Fed defines subprime as below 620.

There’s a time lag in monthly reporting, so auto finance statistics for any given quarter miss the tail end of the quarter. For the first quarter of 2025, that means the origination numbers missed the late-March surge in demand, when consumers rushed to buy cars and trucks ahead of coming tariffs. Those late-March closings should show up in second-quarter numbers, the New York Fed researchers say.

New-Old Bills to Pay

“Overall, household net worth looks pretty strong,” researchers for the New York Fed say in an online press briefing – except for borrowers with the lowest credit scores, who may be struggling to pay their household bills. The New York Fed has a policy of not quoting individual researchers by name.

Meanwhile, a new factor is weighing on some, typically younger, households: Millions of student loans are being phased out of government loan forgiveness and now must be paid.

There’s a big overlap between households with student loans and households paying off auto loans, so it’s possible some households may have less money available for auto loans now that their student loans are due again, the researchers say.

Not an Issue (Mostly)

New-car dealers aren’t too concerned about credit availability for consumers, according to a separate study from Cox Automotive. Dealers in the Cox Dealer Sentiment Index for the first quarter rank credit availability for consumers as the No.6 factor holding back business, well below the Top 3 of interest rates, the economy and market conditions.

Serious delinquencies in auto finance account for 4.99% of the total balance outstanding in the first quarter, up from 4.41% a year ago, the New York Fed says. The New York Fed defines serious delinquencies as 90-plus days past due.

However, the rate at which auto finance accounts are transitioning into delinquency is leveling off, Fed researchers say.