What will happen is they will repossess those cars, which will flood the used car market—driving down the value (and thus the trade in value) of existing used cars and the affordability of new cars.
The sub prime car loan market is just a nasty place to do business.
That’s probably a good thing. The used car market still hasn’t recovered from the cash for junkers purge. The primary source for used cars right now are rental companies, so the usage is high mileage and pretty expensive. I had to buy a car last year and was intending on going used (as I usually do) but the used market is so grossly overvalued I went new. Basically for $3G more I got a car 3 year younger car with 50,000 less miles plus all the warranties.