The U.S. auto market is facing falling demand and looser loan standards, according to a new report Tuesday from Moody's Investors Service.
The firm is predicting sales to fall about 3 percent in 2018 to 16.8 million vehicles, down from the 2016 high of 17.4 million units.
"Signs are there that we might be approaching an inflection point in the marketplace for autos," William Black, managing director at Moody's, said in an interview with "Power Lunch" on Tuesday.
Moody's is also forecasting a drop in used-car prices thanks to pressure from a record number of off-lease supply.
When it comes to auto loans, Moody's said strong competition among banks, credit unions and finance companies has led to looser underwriting standards. That is "driving rising delinquencies and losses," the report said.
There is currently $1.1 trillion in outstanding auto loans, Black pointed out.
"That's the biggest it's ever been," he said.
— CNBC's AJ Vielma contributed to this report.