In this article, we will be taking a look at the 25 states having trouble with auto loan payments in the US. Before we dive into the list, let’s take a closer look at the current state of the auto finance market.
A Quick Look at the Auto Finance Market
The auto finance market plays a vital role in the global economy, enabling millions of individuals around the world to purchase vehicles and access transportation. A strong auto finance market also supports the growth of related industries, such as manufacturing and retail. According to a report by The Business Research Company, the global auto finance market was estimated to have reached a value of $2.08 billion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 11.2% from 2024 to 2028 to reach a value of $3.57 billion by the end of the forecast period.
However, a significant number of states in the US are struggling with auto loan payments, highlighting the need for a closer look at the current state of the market. The share of US auto loan debt falling into delinquency has continued to rise. As reported by the Federal Reserve Bank of New York, auto loan balances have increased by $12 billion in the fourth quarter of 2023. This marks the continuation of a trend that began in 2020, with the total auto loan balance now standing at $1.61 trillion.
Auto Finance in the Digital Age
Despite the challenges facing the auto finance market, technological innovations and the ongoing process of digitization are poised to play a pivotal role in driving the industry’s future growth. Capital One Financial Corporation (NYSE:COF) is one of the largest publicly traded financial companies in the US. Specializing in credit cards, auto loans, and banking, it offers a wide range of financial products and services to consumers, commercial clients, and small businesses through a variety of channels.
As one of the largest car finance companies in the US, Capital One Financial Corporation (NYSE:COF) is using technology to disrupt the auto finance industry. Through Capital One Auto Finance, the corporation offers auto financing and refinance services. Technology is at the core of Capital One Auto Finance’s strategic approach. The company is leveraging real-time data analysis, artificial intelligence, machine learning, and cloud computing capabilities to address complex industry challenges and develop innovative products and services. In 2023, Capital One Financial Corporation (NYSE:COF) introduced the Navigator Platform, a digital tool designed to help car dealers provide a more transparent and accurate financing experience to customers. The platform allows dealers to better understand consumers’ buying preferences upfront and offers personalized financing options. Car buyers can browse participating dealers’ inventories. They can also specify down payment, trade-in, and term length to calculate a payment that works best for them. Using its technology and partnerships with lenders, Capital One Auto Finance can get pre-qualification for most applicants, enabling them to build an offer using real rates and payments. Amid a challenging car market, Capital One Financial Corporation (NYSE:COF) is utilizing technology to bridge the gap between car buyers and dealers by providing a seamless and transparent experience.
Now that we have discussed what’s going on in the auto finance market, let’s take a look at the 25 states having trouble with auto loan payments in the US.
A female customer signing a loan agreement for her car purchase, demonstrating their auto loan services.
Methodology
In this article, we compiled a list of 25 states having trouble with auto loan payments in the US. To collect data for our list, we consulted the Federal Reserve Bank of New York, which forms part of the central banking system of the United States. This database provided us with details on the auto loan delinquency rates by state, specifically the percentage of auto debt balances that are over 90 days delinquent in the fourth quarter of 2023. We used the latest data available in their dataset to rank the 25 states having trouble with auto loan payments in the US, which are listed below in ascending order of their auto loan delinquency rates in the fourth quarter of 2023.
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25 States Having Trouble with Auto Loan Payments in the US
25. Pennsylvania
Percent of Auto Debt Balance 90+ Days Delinquent: 3.84%
Pennsylvania is a state in the Northeastern region of the United States and it ranks among the 25 states having trouble with auto loan payments in the US. It is one of the most populated states in the country. According to recently reported data, Pennsylvania has an auto loan delinquency rate of 3.84%.
24. West Virginia
Percent of Auto Debt Balance 90+ Days Delinquent: 4.04%
West Virginia is a landlocked state in the Eastern region of the United States. It is one of the smaller and less populous states. West Virginia’s auto loan delinquency rate stands at 4.04%.
23. Arizona
Percent of Auto Debt Balance 90+ Days Delinquent: 4.16%
Arizona is a landlocked state in the Southwestern region of the US. It is one of the largest states in the US by area. According to recently reported data, the US state of Arizona has an auto loan delinquency rate of 4.16%.
22. Kentucky
Percent of Auto Debt Balance 90+ Days Delinquent: 4.3%
Kentucky, a state in the Southeastern region of the US, ranks among the states having trouble with auto loan payments in the US. Kentucky’s auto loan delinquency rate stands at 4.3%.
21. Illinois
Percent of Auto Debt Balance 90+ Days Delinquent: 4.33%
Illinois is a state in the Midwestern region of the United States. It is the sixth most populated state. Auto loan delinquency data shows that the US state of Illinois has an auto loan delinquency rate of 4.33%.
20. Oklahoma
Percent of Auto Debt Balance 90+ Days Delinquent: 4.46%
Oklahoma, a state in the South Central region, ranks among the top 20 on our list of states having trouble with auto loan payments in the US. Oklahoma’s auto loan delinquency rate stands at 4.46%.
19. Ohio
Percent of Auto Debt Balance 90+ Days Delinquent: 4.47%
Ohio, a state in the Midwestern region, ranks among the most populated states in the US. It is one of the biggest automobile-producing states. Ohio has an auto loan delinquency rate of 4.47%.
18. Florida
Percent of Auto Debt Balance 90+ Days Delinquent: 4.47%
Florida ranks 18th on our list of states having trouble with auto loan payments in the US. It is the third most populated state in the US. Florida’s auto loan delinquency rate stands at 4.47%. Florida also ranks among the states that have trouble with student loan payments.
17. Missouri
Percent of Auto Debt Balance 90+ Days Delinquent: 4.67%
Missouri is a landlocked state in the Midwestern region of the US. According to recently reported data, the US state of Missouri has an auto loan delinquency rate of 4.67%.
16. Maryland
Percent of Auto Debt Balance 90+ Days Delinquent: 4.71%
Maryland is a Mid-Atlantic state and it has one of the highest car registration fees in the US. It is one of the most densely populated states in America. Maryland’s auto loan delinquency rate stands at 4.71%.
15. Texas
Percent of Auto Debt Balance 90+ Days Delinquent: 4.72%
Texas, in the South Central region, ranks among the top 15 states having trouble with auto loan payments in the US. It is the second-largest state in the United States by both land area and population. Texas has an auto loan delinquency rate of 4.72%.
14. Nevada
Percent of Auto Debt Balance 90+ Days Delinquent: 4.73%
Nevada is a state in the Western region of the US. It is best known for its large casinos, gambling, and vibrant nightlife. Nevada’s auto loan delinquency rate stands at 4.73%.
13. Tennessee
Percent of Auto Debt Balance 90+ Days Delinquent: 4.82%
Tennessee is a landlocked state in the Southeastern region of the US. According to recently reported data, the state’s auto loan delinquency rate stands at 4.82%. Tennessee also ranks high among the states with the lowest average IQ and well-being scores.
12. Arkansas
Percent of Auto Debt Balance 90+ Days Delinquent: 4.82%
Arkansas is a Southern state that ranks 12th on our list of the states having trouble with auto loan payments in the US. It is one of the poorest states in the US in 2024. Arkansas has an auto loan delinquency rate of 4.82%.
11. New Mexico
Percent of Auto Debt Balance 90+ Days Delinquent: 5.11%
New Mexico is a state in the Southwest region of the US. While being the fifth largest state by land area, it ranks among the least densely populated states in the US. New Mexico’s auto loan delinquency rate stands at 5.11%.
10. North Carolina
Percent of Auto Debt Balance 90+ Days Delinquent: 5.14%
North Carolina, a state in the Southeastern US, ranks among the top 10 on our list of the states having trouble with auto loan payments in the US. According to recently reported data, North Carolina has an auto loan delinquency rate of 5.14%.
9. South Carolina
Percent of Auto Debt Balance 90+ Days Delinquent: 5.2%
South Carolina is a state in the coastal Southeastern region of the US. Along with the US state of North Carolina, it makes up the Carolinas region of the East Coast. South Carolina’s auto loan delinquency rate stands at 5.2%.
8. Delaware
Percent of Auto Debt Balance 90+ Days Delinquent: 5.2%
Delaware, in the Mid-Atlantic region of the US, ranks 8th on our list of the states having trouble with auto loan payments in the US. It is the 2nd smallest and 6th least populated state in America. Delaware has an auto loan delinquency rate of 5.2%.
7. Michigan
Percent of Auto Debt Balance 90+ Days Delinquent: 5.24%
Michigan, a state in the Great Lakes region of the Upper Midwest region in the US, is the 10th most populated state. Michigan’s auto loan delinquency rate stands at 5.24%.
6. Hawaii
Percent of Auto Debt Balance 90+ Days Delinquent: 5.24%
Hawaii is an island state that is located southwest of the US mainland. The state of Hawaii has an auto loan delinquency rate of 5.24%. It ranks 6th on our list of the states having trouble with auto loan payments in the US.
5. Indiana
Percent of Auto Debt Balance 90+ Days Delinquent: 5.29%
Indiana, a state in the Midwestern region of the US, ranks among the top 5 on our list of states having trouble with auto loan payments. Indiana’s auto loan delinquency rate stands at 5.29%.
