Average delinquency rates, interest rates, and payments on auto loans aren’t really affected by geographic location. Rather, they are determined by a driver’s creditworthiness and history, income, debt, and loan amount and term. But the stats by location show typical habits of drivers in each state.
Over the past year, autocrime rates have risen – meaning they are returning to normal pre-pandemic levels, according to TransUnion. This increase is mainly due to the resurgence of arrears following the end of the pandemic relief effort.
In addition, the shortage of vehicles led to more demand and at the same time a lower supply – which means high acquisition and financing costs. Overall, loan balances grew 8 percent in 2022 from an already impressive $1.35 trillion in 2021, according to Experian. So when interest rates rise and arrears return to more normal levels, you should consider where your home state sits in the mix.
Car payment statistics
- According to Experian, the average monthly payment for new cars is $667.
- The average monthly payment for used cars is $515, according to Experian.
- According to the Kelley Blue Book, new cars cost an average of $48,301.
- The average loan term for new cars is 69.46, according to Experian.
- The average loan rate for new cars is 4.33 percent, according to Experian.
- The average loan term for used cars is 68.01 months, according to Experian.
- The average loan rate for used cars is 8.62 percent, according to Experian.
- Drivers pay an average down payment of $6,026, according to Edmunds.
States with the highest auto loan balance
An auto loan balance is the remaining amount that a driver must pay on their loan. The average auto loan balance across the country is $5,210. Average state balances range from about $3,000 to over $6,000.
This data, collected by the New York Fed Consumer Credit Panel and Equifax, is used to examine the top ten states — with two additional states due to a tie — with the highest auto loan balances.
- Texas: $7,270 balance
- Louisiana: $6,510 balance
- Georgia: $6,080 balance
- Arkansas: $5,990 balance
- Florida: $5,980 balance
- Oklahoma: $5,900 balance
- New Hampshire: $5,860 balance
- North Dakota: $5,800 balance
- Mississippi and Arizona: $5,780 balance
- Utah and Nevada: $5,710 balance
These higher balances are due in part to some macro-environmental issues across the country, and not just state-specific. An important factor is the question of supply and demand. Vehicle stocks shrank over the past year due to supply chain issues and the cost of available cars rose – resulting in drivers having to finance more.
At the same time, drivers opted for longer loan terms to reduce the monthly cost of their car payments. Average used car running times reached a record high of 68.01 months in the second quarter. The conditions for new cars showed a similar picture, with driver financing averaging 69.46 months.
Average car payment by state
Average monthly payment figures for each state were calculated using a combination of the state’s average car price, average loan term, and interest rate.
It can take drivers anywhere from 24 to 60 months to pay off their vehicle, with some taking up to eight years – which can be a risk. A longer term reduces the monthly costs, but leads to higher costs overall.
The interest rate you pay for your vehicle depends on various factors such as your creditworthiness, the type of vehicle and the terms you have chosen. According to Experian’s data for the second quarter, drivers can expect an average of about 4.33 percent for new vehicles and 8.62 percent for used vehicles. Below are the average APRs as of October 26, 2022, based on a Bankrate study.
Average used car price by state
Vehicle prices reached record highs in 2022. New vehicles cost over $48,000 in the summer of 2022 — up 11.9 percent from the same period last year, according to the Kelley Blue Book.
Thankfully, used car prices are back to stable prices, the median price of a used car selling for $28,237 in September, according to the Kelley Blue Book. In terms of vehicle types, SUVs remain the most popular, outperforming 60 percent of funded vehicles in Q2 2022, according to Experian.
The top-selling vehicles in North Dakota – which carries the highest average used car price – are SUVs. While in Nevada, at the other price end, the most popular vehicle type is passenger cars, according to iSeeCars.
Auto loan arrears by state
Texas, which has the highest average car payment, has a high average late payment rate, but not the highest among the top states. Mississippi leads at 6.14, much higher than the national averages shown below.
Interestingly, however, TransUnion found that consumers continue to value their car loans in line with other financial commitments. Right behind mortgages and far higher than credit cards, drivers prioritize vehicle payments.
When it comes to prioritizing your payment, preparedness is key. All you have to do is fund what you can afford. The best way to do this is to calculate your expected monthly payment along with the interest accrued over the life of the loan.
States with the lowest auto loan balance
Hawaii takes the gold medal for lowest average auto loan balance, closely followed by home of the Mayflower, Massachusetts. These states have averages that are dramatically below the national median of $5,210. But as explained, the auto loan balance is independent of the zip code and relates more to each state’s typical background.
Financial literacy, income, and cost of living all play an important role. For example, looking at the states with the lowest balances, three out of five have some of the highest median household incomes in the country, according to the Census Bureau. Digging deeper, average credit scores also tend to be higher.
Hawaii’s average FICO score is 723, which falls in the “Very Good” category according to Equifax. The remaining states have similarly competitive averages.