Subprime auto loan originations increased 9.8% year over year in the second quarter of 2026, significantly outpacing growth in other credit tiers, according to TransUnion data reported by Car Dealership Guy News.

The findings highlight a shift in auto lending activity as financial institutions expand financing opportunities for borrowers with lower credit scores.

TransUnion’s third-quarter Credit Industry Insights Report showed approximately 6.8 million auto loan originations during the second quarter, an increase of 100,000 from the same period in 2025. Total outstanding auto loan balances reached $1.65 trillion, up 2.1% year over year.

Satyan Merchant, senior vice president and automotive and mortgage business leader at TransUnion, attributed the increase in subprime lending to continuing transportation needs, improving vehicle affordability conditions relative to recent years, and lenders refining their underwriting models.

Merchant also noted that overall delinquency stood at 1.41%, down two basis points from a year earlier.

What It Means for Dealers and Agents

For dealerships and their F&I partners, increased lending activity in the subprime segment could create opportunities to serve more credit-challenged customers. Maintaining strong lender relationships, accurate credit applications and effective fraud prevention practices will remain important as financing activity evolves.

Source: Car Dealership Guy News, November 6, 2026, reporting on TransUnion’s Q3 Credit Industry Insights Report.

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