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Subprime auto delinquencies have already surpassed 2008 financial crisis levels, and lenders are now engaging in extend-and-pretend tactics to mask losses. This mirrors the early stages of the subprime mortgage collapse, where Wall Street prioritized investor returns over borrower sustainability. With the Fed holding rates high and inflation sticky, the consumer is cracking, and this article is a symptom of a late-cycle credit bubble deflating.

Subprime auto lenders used tactics such as extending loan terms or quickly repossessing cars to benefit investors while borrowers struggled.