In 2025, auto loan debt in the U.S. has ballooned to a staggering $1.6 trillion. Subprime lenders (those who offer high-interest loans to borrowers with poor credit) are now facing a wave of bankruptcies. Tricolor Holdings, a major subprime lender, recently filed for Chapter 7 amid fraud allegations and massive defaults. This collapse has triggered market jitters and raised concerns about the stability of the auto finance sector. If you’ve financed a car recently, especially through a subprime lender, it’s time to pay attention.
