By Trump ShagsKids
The Trump administration has spent the first months of 2026 touting the strength of the American economy. But beneath the carefully curated headlines, a very different reality is playing out in the parking lots and driveways of working-class America. Auto repossessions are skyrocketing, loan delinquencies have surpassed levels seen during the 2008 financial crisis, and millions of families are being forced to choose between keeping their cars and keeping a roof over their heads .
The data tells a story the White House doesn’t want you to hear: the Trump economy is failing the very people who voted for it.
The Numbers Don’t Lie
According to Fitch Ratings and Equifax data, the 60-day delinquency rate on subprime auto loans has surged to a record 6.9 percent—far exceeding the 5 percent peak reached during the 2008 financial crisis . Serious delinquency rates for auto loans have more than doubled since 2021, and total auto debt has ballooned by $312 billion over five years to a record $1.67 trillion .
Senator Elizabeth Warren (D-Mass.) recently launched a probe into the auto lending industry, noting that repossessions have reached “levels not seen since the 2008 financial crisis” . In her letters to major lenders including Chase Auto, Capital One, and Ally Financial, Warren highlighted that the Trump administration has “kneecapped” the Consumer Financial Protection Bureau’s ability to protect Americans from illegal repossessions .
This is not a statistical blip. This is a crisis.
The K-Shaped Recovery: A Tale of Two Americas
What makes these numbers particularly damning is their concentration. While prime borrowers—those with good credit—continue to make payments with delinquency rates below 0.37 percent, subprime borrowers are defaulting at rates not seen in decades .
“This isn’t ‘people got dumber with money,'” Michael Ryan, a finance expert, told Newsweek. “It’s a delayed bill for a car market that went insane, colliding with a brutally tight household budget” .
The Federal Reserve Bank of New York’s latest report confirms a “K-shaped” debt crisis: high-income households continue to benefit from record-high asset valuations, while younger and lower-income borrowers are increasingly “maxed out” . Researchers noted that the decline in repayment ability among low-income and young borrowers corresponds with rising unemployment rates in certain demographics—among those aged 16 to 24, unemployment hit 10.4 percent in December, near the highest level since 2021 .
Why This Contradicts Trump’s Economic Narrative
President Trump has consistently painted a picture of economic prosperity. On the campaign trail, he promised to “end inflation on Day One” . His administration has promoted tax breaks and touted market performance as evidence of success.
Yet the auto loan crisis reveals the lie at the heart of this narrative.
First, inflation has not been tamed for working families. Vehicle prices surged over 21 percent from 2020 to 2023, and the average new car now hovers around $50,000 . Since 2020, maintenance and insurance costs have risen by 48 percent and 56 percent respectively . While the administration points to cooling inflation metrics, the cumulative burden on household budgets continues to grow.
Second, Trump’s policies have exacerbated the problem. Economists surveyed by Wolters Kluwer noted that two of Trump’s policies have actually driven inflation higher: tariffs on imports and pressuring the Federal Reserve to cut rates . The full costs of tariffs “have not yet been felt,” according to Northern Trust economists .
Third, the administration’s response has been performative rather than substantive. When Trump addressed the Detroit Economic Club, he proposed making interest on car loans tax-deductible—a plan that economic analysts estimated would reduce tax revenues by more than $100 billion over 10 years while primarily benefiting the one-fifth of taxpayers who itemize deductions . Meanwhile, his administration ended consumer tax credits of up to $7,500 for electric car buyers, contributing to a 41 percent drop in EV sales .
The Human Cost Behind the Statistics
Kevin Thompson, CEO of 9i Capital Group, captured the impossible choices families face: “Do I pay the car note or do I pay rent? Rent usually wins” .
This is not abstract economic data. When a family loses their car, they often lose their ability to get to work, take children to school, or access healthcare. In much of the United States, “living without a car is impossible,” notes Northern Trust chief U.S. economist Ryan Boyle . Repossession happens within months of a missed payment, and stretched loan terms leave more borrowers with no equity—preventing a sale that could stop the tow truck .
The consequences ripple outward. Nearly 10 percent of student loan balances are 90-plus days overdue, with up to 13 million borrowers potentially defaulting by year-end . Defaults trigger wage garnishment and tax refund seizures, further squeezing household budgets and creating a cycle of debt that families cannot escape .
The Administration’s Regulatory Retreat
Perhaps most telling is what the Trump administration has chosen not to do.
Warren’s probe explicitly cites that “the Trump Administration has kneecapped the agency’s ability to protect consumers from auto repossession errors” . The Consumer Financial Protection Bureau, created after the 2008 crisis to prevent exactly this kind of predatory lending, has been systematically sidelined.
When asked about the surge in delinquencies, the administration’s response has been silence or deflection. The White House press secretary has denied that the Justice Department’s investigation into Federal Reserve Chair Jerome Powell was directed by Trump, but offered no comment on the auto loan crisis affecting millions of Americans .
What Happens Next
Economists warn that this is just the beginning.
“If more low-income and subprime borrowers lose cars, local labor participation and job stability get hit, especially in areas with poor public transit,” Ryan told Newsweek. “That feeds back into more delinquencies across other debts” .
The “interest drag” on the economy is expected to be permanent: households now spend over $560 billion annually on interest payments alone—money not being spent on new homes, technology, or services . Any uptick in unemployment could turn the current delinquency “leak” into a “flood,” potentially forcing the Federal Reserve to cut rates by mid-2026 .
Conclusion: The Truth Beneath the Spin
The Trump administration wants Americans to believe the economy is strong. Stock market performance and GDP figures are paraded as evidence of success.
But for the millions of Americans facing repossession, for the families choosing between car payments and rent, for the workers whose wages haven’t kept pace with the cost of living—the economy is not strong. It is fragile, unforgiving, and increasingly unequal.
The auto loan delinquency crisis is not an accident. It is the predictable result of policy choices: tariffs that raised prices, deregulation that removed consumer protections, and tax cuts that primarily benefited the wealthy while doing nothing for struggling families.
When President Trump claims credit for the economy, remember the 6.9 percent. Remember that more Americans are unable to pay their car loans today than during the 2008 financial crisis. Remember that while the White House celebrates, tow trucks are taking away the vehicles that working families need to survive.
The numbers don’t lie. And they tell a story of broken promises.
This article is based on data from the Federal Reserve Bank of New York, Fitch Ratings, Equifax, and reporting from Newsweek, as of February 2026.