Subprime Auto Loan Delinquency Is Only Getting Worse

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Happy Thursday! It's November 11, 2025, and this is The Morning Shift — your regular roundup of nan apical automotive headlines from astir nan world, successful 1 place. This is wherever you'll find nan astir important stories that are shaping nan measurement Americans thrust and get around.

In this morning's edition, we're looking astatine really galore car owners are down connected their loans, arsenic good arsenic nan latest steps towards enacting a U.S./EU waste and acquisition deal. We'll besides look astatine Toyota's committedness of an 11-figure finance successful U.S. operations, and Polestar's little than stellar numbers. 

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Subprime car loans are successful bad shape, and they're trending worse and worse. In October, nan complaint of 60-day delinquencies deed nan highest level ever recorded. This is what we successful nan manufacture telephone an "omen" or "portent," which are ever perfectly good and bully things that nary 1 needs to interest about. From Reuters:

The stock of subprime borrowers astatine slightest 60 days down connected their car loans roseate to 6.65% successful October, nan highest level connected record, according to Fitch Ratings information going backmost to nan early 1990s

...

PrimaLend, which serves nan "buy-here-pay-here" car financing marketplace — wherever dealers waste and straight finance vehicles for customers pinch mediocre aliases constricted in installments — revenge for bankruptcy protection past month.

Tricolor, which sold cars and provided car loans mostly to low-income Hispanic communities successful nan Southwestern United States, besides revenge for bankruptcy successful September.

A further deterioration successful in installments value could measurement connected lenders, particularly astatine a clip erstwhile investors are highly delicate to signs of accent successful indebtedness portfolios.

This sparked immoderate chat successful nan Jalop Slack astir what happens erstwhile Affordable Care Act credits expire. Do group springiness up their car to salary for their healthcare, aliases extremity paying for healthcare truthful they tin spend their car? In our society, it's astir apt nan second — we don't precisely person nationalist transit alternatives successful overmuch of nan country. Is it bully erstwhile your federation is comprised of sick group who can't get aesculapian care, inundating emergency rooms erstwhile their symptoms yet go unignorable, only to spell into crippling lifelong aesculapian debt?

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It's tariff clip again! You whitethorn not person seen them successful TMS overmuch recently, but don't interest — our profoundly dumb waste and acquisition warfare is still on. The EU and U.S. whitethorn person a woody by now, but location are still immoderate specifics astir implementation to beryllium worked out. Now, nan EU is moving connected those specifics. From Automotive News:

The European Union is group to propose a scheme to nan U.S. that would instrumentality nan adjacent shape of nan waste and acquisition statement nan 2 sides reached this summer, according to group acquainted pinch nan matter.

The push comes arsenic nan EU's waste and acquisition chief, Maros Sefcovic, is owed to meet his U.S. counterparts later this month, said nan people, who said connected nan information of anonymity.

The move is successful consequence to proposals Washington sent Brussels earlier this twelvemonth demanding a legally binding scheme to revise EU regulations it said wounded U.S. businesses, according to nan people.

The woody agreed betwixt European Commission President Ursula von der Leyen and U.S. President Donald Trump successful August group a 15 percent tariff connected astir EU equipment entering nan U.S., but besides included pledges to support moving connected issues specified arsenic really to woody pinch alloy exports and non-tariff barriers.

Right now, American companies are paying 15 percent tariffs connected European cars, but 50 percent connected nan alloy and aluminum needed to make cars successful nan States. If you're wondering why we haven't seen much automakers unfastened up shop here, it's proviso concatenation issues for illustration that — sometimes nan tariff connected a completed car is little costly than nan tariffs connected nan parts to make one. 

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Last month, President Trump said that Toyota would walk $10 cardinal connected shoring up its U.S. presence. The institution wouldn't opportunity whether aliases not that was true, and galore speculated that nan 11-figure number included anterior investments. Now, it's official: Toyota is spending large connected nan States. Maybe. From Bloomberg:

Toyota Motor Corp. confirmed it will plow arsenic overmuch arsenic $10 cardinal into nan US complete nan adjacent 5 years to boost its section operations, little than a period aft President Donald Trump flagged that nan Japanese carmaker planned specified an investment.

The announcement clears up a confusing infinitesimal from Trump's sojourn to Tokyo past month, erstwhile he said Toyota would build plants each complete nan US "to nan tune of complete $10 billion." At nan time, nan automaker wouldn't corroborate specified a plan, calling it specified speculation.

The automaker provided nary further specifications connected really it will walk nan funds. David Christ, Toyota's US income chief, said that will beryllium revealed astatine a later date.

Is this Toyota covering for Trump, to ingratiate nan institution to him? Promising to salary "up to" $10 billion, without details, is benignant of meaningless — investing 1 dollar is "up to" $10 billion. We'll get much specifications astatine immoderate point, but for now this could easy conscionable beryllium playing bully pinch nan man successful charge. 

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Polestar is doing rough. Rough enough, successful fact, that nan institution risks being delisted from American trading markets — thing nary institution wants. So, Polestar whitethorn enact an overseas scheme to instrumentality around. From Reuters:

Polestar reported a wider third-quarter nonaccomplishment connected Wednesday and said it would behaviour a reverse banal divided – reducing nan number of its existing shares while expanding their worth – successful an effort to clasp its Nasdaq listing.

Shares successful nan company, majority-owned by China's Geely Holding (GEELY.UL) and chair Li Shufu, dropped arsenic overmuch arsenic 17% successful early New York trading.

It besides reported a third-quarter nett nonaccomplishment of $365 million, compared pinch a $323 cardinal nonaccomplishment a twelvemonth earlier.

A reverse banal divided is simply a business successful which a institution reduces nan number of outstanding shares, but proportionally increases their worth — fundamentally mashing aggregate shares together. It doesn't really use investors successful nan ways you mightiness expect — portfolios tin clasp fractional shares — but it raises nan nominal stock value capable to look bully int he Nasdaq's eyes. The system is each clone anyway. 

Aren't they ever complaining astir that? Huh. Weird.