Auto brand better than credit score at predicting default

plot of brands against median vehicle value, credit score, and % of balance past due — Fascinating that credit score and vehicle value have far less bearing than brand of vehicle

Since auto loan delinquencies are spiking, which is a warning indicator for recession, it is worth diving into some interesting data on auto loan delinquency.

The fun part is speculating why BMW owners among other luxury brands are more often behind on their payments. The EV-only brands are not on here, but I suspect they have such high leasing rates that the loan numbers may not be as revealing. Worth mentioning Tesla owners have the longest loans in the industry which means your HW4 onboard computer (or HW3 in my case) would be obsolete before you finish making payments.

I saw Cadillac and Lincoln had below-average delinquency, and think of those brands as for older folks. My hypothesis is the older set has more money, and/or is wiser with money so spends below their threshold. I searched for average age of brand buyers and came across some Carmax data from 2017. Cadillac is indeed the oldest (though not pictured, Tesla buyers are actually even older) but the German luxury brand buyers were also older. I think the hypothesis does explain why Mazda saw such high delinquecy with the youngest average buyer age.