We recently compiled a comprehensive report detailing the 25 States Having Trouble with Auto Loan Payments in the US. In this article, we’ll be taking a look at the state that is having the most trouble with auto loan payments in the US.
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 state that is having the most trouble with auto loan payments in the US.
A customer signing a loan agreement with the bank’s representative in a private office.
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 based on their auto loan delinquency rates in the fourth quarter of 2023. The state that is having the most trouble with auto loan payments in the US is listed below.
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This State is Having the Most Trouble with Auto Loan Payments in the US
1. Mississippi
Percent of Auto Debt Balance 90+ Days Delinquent: 6.77%
Mississippi, a state in the Southeastern region, tops our list of the states having trouble with auto loan payments in the US. The state of Mississippi is home to some major automotive factories. However, it is also the poorest state in the US in terms of per capita income. According to the most recently reported data by the Federal Reserve Bank of New York, Mississippi’s auto loan delinquency rate stands at 6.77%.
Want to learn more about the states that are having trouble with auto loan payments in the United States? Check out our comprehensive report detailing the 25 States Having Trouble with Auto Loan Payments in the US.
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