Subprime borrowers accounted for 15.3% of U.S. auto finance originations in the fourth quarter, according to Experian’s latest State of the Automotive Finance Market Report, claiming their largest share since 2021.

In a release, Head of Automotive Financial Insights Melinda Zabritski says higher prices and interest rates have contributed to an “evolving” subprime space.

“In Q4 2025, the average loan amount for a new vehicle increased $1,882 from the prior year to $43,582, and the average interest rate for a new vehicle went from 6.34% last year to 6.37% this quarter. As a result, the average monthly payment increased from $746 to $767 in the same time frame,” Zabritski writes.

Subprime accounted for 15.7% of the market in January, up 290 points from the same month a year ago, according to Dealertrack (div. Cox Automotive)’s latest Credit Availability Index.

Experian analysts say key metrics such as the percentage of new vehicles with financing (82%), percentage of vehicles leased (24.4%) and percentage of on-time loans (65.8%) were essentially flat from the prior-year quarter. Banks (29.3%) topped captive finance companies (27.6%) and credit unions (19.6%) as the nation’s No. 1 finance source type for the first time in four years.

Read the full report at Experian