(Stacker) — With supply-chain issues during the pandemic driving vehicle prices to record levels, car buyers are taking out bigger loans in order to afford the vehicles they need for everyday living.
Since 2003, the nationwide total average auto loan balance per capita has increased from $2,960 to $5,210—an increase of around 76%. Some consumers have found this to be difficult to manage: In the fourth quarter of 2021, 4% of all auto debt balances in the country were over 90 days delinquent.
Sound Dollar compiled statistics from the Federal Reserve Bank of New York’s “State Level Household Debt Statistics 2003-2021” report to see which states have the highest auto debt balances. The report was released in February 2022 and contains data from 2021. Data in the report is from the New York Fed Consumer Credit Panel and Equifax. If more than one state had the same balance, they tied for the same rank.
Check out the national list.
Louisiana by the numbers
- Average auto debt per capita: $6,510
- Total debt per capita: $43,190
A perfect storm of problems helped create today’s situation. For new cars, the initial lockdowns in 2020 halted production for nearly three months, which cut back on the supply of new cars hitting sales lots. In 2021, a microchip shortage made the situation worse as manufacturers couldn’t get the parts they needed to build new cars. The supply of cars tanked just as consumers started spending again, causing prices to go up with increased demand.
When consumers couldn’t get their hands on new cars, they turned to the used car market. Supply couldn’t keep up with the demand, so prices skyrocketed there as well, jumping 42% since the pandemic started to an average of $28,205.
While car buyers are taking out larger loans to fund their purchases, they are also stretching their payments longer. The most common auto loan term used to be 60 months, but now borrowers are seeking out 72-month and even 84-month loan terms. This contributes to higher auto debt balances, costs consumers more in interest payments for the term of the loan, and it leaves them with less money to spend elsewhere.
Read on below to see which states have the highest auto loan balances.
States with the highest auto loan balances
- Texas: $7,270 average auto debt per capita.
- Louisiana: $6,510 average auto debt per capita.
- Georgia: $6,080 average auto debt per capita
- Arkansas: $5,990 average auto debt per capita
- Florida: $5,980 average auto debt per capita
This story originally appeared on Sound Dollar and was produced and distributed in partnership with Stacker Studio.
Article has been re-published pursuant to a CC BY-NC 4.0 License: https://creativecommons.org/licenses/by-nc/4.0/?ref=chooser-v1