If You Live Here, Your Car Loan Is More Likely To Be a Problem
But the problem isn’t the same everywhere. In fact, it can vary significantly by state, with delinquency rates standing at nearly double the national average in many debt-prone areas of the country, according to a February 2019 report by the U.S. PIRG Education Fund citing statistics from the Federal Reserve Bank of New York.
So where are you more likely to find yourself carrying more auto debt than your neighbors? Here are the 10 states where the problem is at its worst along with the state’s average auto loan debt per capita.
(Source: Flickr/Ken Lund)
The list begins with three states bearing a lot of seeming similarities. Each is a lightly populated Western or Midwestern state where public transportation is limited to a few larger cities and where cars are often a necessity to get from Point A to Point B. But their presence on this list carries some serious contradictions, too. For one, Utah had the top-ranked job market in 2018. North Dakota, too, is in the midst of a modern-day oil boom, while Nevada—long buoyed by the casino and tourism industries—recently recorded its highest month of gaming revenue since 2013. It just goes to show that even states with strong economic factors in their favor aren’t immune from the problem of auto debt.
(Source: iStock Photo)
The Sooner State is no stranger to problems stemming from auto debt. A law in Oklahoma makes it easier to repossess cars by allowing car dealers and lenders to place a GPS tracking device on a vehicle when the buyer consents to the tracking.
The Old Lion State faces a dubious dishonor by taking the eighth spot on this list. True, the amount owed here on car loans only makes up 7 percent of the state’s outstanding consumer debt, but its per-capita total is unusually high when compared to neighboring District of Columbia, which owes a median amount of just $3,010—the second lowest in the country.
(Source: Wikimedia/Daniel Schwen)
New Mexico boasts some of the lowest property taxes in the nation, and economic growth in areas like Santa Fe and Albuquerque caused Bloomberg to tout the state as the “top performing state economy since Trump took office.” But it’s also the home of some allegedly questionable auto lending practices, which prompted the Federal Trade Commission to sue a state auto group last year after complaints that it was using false and deceptive practices to lure members of the Navajo Nation into car loans.
(Source: Wikimedia/Alexius Horatius)
The Granite State is perennially at or near the top of the list of states with the most student loan debt per student. Unfortunately, New Hampshire also makes this list with one of the highest totals for auto debt as well. But there is some good news. You’re less likely to have your car stolen if you live in Manchester, N.H., which has one of the lowest auto theft rates of any metro area in the country.
(Source: Flickr/Alex Butterfield)
The extremely low cost of living in Arkansas doesn’t stop it from cracking the top five among states with the most auto debt per person. Just over 3 million people now live in Arkansas, and while they maintain a rather reasonable level of credit card debt, drivers can expect to pay a mighty price for the ability to drive across the Ozarks.
(Source: Flickr/Christian Collins)
Somebody call Sheriff Longmire; this just isn’t right. Despite being a sparsely populated region of the West known for its understated beauty, household debt in Wyoming was $46,410 in the last quarter of 2018. Car loans are definitely additive to the problem, with the average resident owing $5,240 in auto debt.
(Source: Flickr/Neil Williamson)
Even Georgia’s former Democratic gubernatorial candidate Stacey Abrams is no stranger to what she terms the “millstone” of debt. She penned a lengthy magazine piece during the race last fall that acknowledged she was struggling with more than $200,000 in deferred tax payments, student loans and credit card debt—due in no small part to the costs of taking care of her parents and her brother’s daughter. Sadly she’s not the only Georgia resident facing debt problems, as borrowers in Georgia are charged an average interest rate of more than 17 percent on car loans, which helped land the state at number three on this list.
(Source: Flickr/Pedro Szekely)
Not only does Louisiana have the second highest average auto debt per capita, but its residents carry an average of nearly $8,000 in credit card debt. Meanwhile, the average credit score in the state is just 650, making subprime interest rates a potential reality for borrowers who need a car of their own.
(Source: iStock Photo)
Everything’s bigger in Texas—including the amount of auto debt you’re most likely to carry. Drivers in the Lone Star State might be able to get cheap gas, but on average its residents owe nearly a grand more than their neighbors to the east in Louisiana.