States With The Highest Car Loan Balances

Geographical location isn’t a big factor influencing average car loan delinquency rates, interest rates and payments. Rather, they are determined by a driver’s credit score and history, income, debts and the loan amount and term. But when you break those stats down by location, you get a peek at the economic conditions in each state.

Over the past year, drivers have had to borrow more for their vehicles. These higher auto loan balances, combined with steep interest rates, have made vehicle ownership a challenge for many. As interest rates and loan balances increase, find out how your home state is doing.

Car payment statistics

States with the highest car loan balance

An auto loan balance is the remaining amount a driver has to pay on their loan. The amount that drivers are spending on their vehicles has been on an upward trend since 2020, according to the Federal Reserve, at $1.63 trillion nationally.

The average car loan balance across the country is $5,680, according to the Federal Reserve. Below are the 10 states with the highest car loan balances in the country.

While vehicle costs have been leveling out, they are still not at pre-pandemic levels, explains Satyan Merchant, senior vice president and automotive and mortgage business leader at TransUnion.

“Affordability continues to pose a challenge for the used vehicle market and, in particular, for below prime consumers, who have seen a buying climate of higher interest rates, increasing lender pullback, and cross-wallet inflation. While some brands continue to see lingering shortages, new vehicle inventories continue to recover from their pandemic-era lows.”

In addition, drivers have been choosing longer loan terms to lower the monthly cost of their car payments. Average used vehicle terms in the fourth quarter of 2024 reached 67.20 months. New vehicle terms told a similar story, with drivers financing for an average of 67.98 months.

Average car payment by state

Sources: iSeeCars and Edmunds

The average monthly payment figures for each state were calculated using a combination of the average used car price, interest rate for each state and a 60-month loan term. However, we didn’t factor in a down payment, which would reduce the monthly payment.

Loan terms typically last between 24 and 84 months. A few lenders even offer 96-month terms. A longer term lowers the monthly cost, but it leads to a higher cost overall.

The interest rate you pay for your vehicle depends on various factors, such as your credit, the vehicle type, and the terms you choose. According to fourth quarter 2024 data from Experian, drivers can expect to pay around 6.35 percent for new cars and 11.62 percent for used cars.

Average used car price by state

SUVs remain the most popular new vehicle type, totaling about 64 percent of financed vehicles in the first quarter of 2025, according to Experian.

Car loan delinquency by state

Source: New York Fed Consumer Credit Panel

Texas has the highest average car loan balance and also the highest average delinquency at 7.92 percent. Florida has the second highest at 6.54 percent, notably more than a point lower than the Texas rate.

When it comes to prioritizing your payment, the key is preparedness. To do this, you must only finance what you can afford. The best way to do this is to calculate your monthly payment and your loan’s lifetime interest, then compare it with your budget.

States with the lowest car loan balance

Source: New York Fed Consumer Credit Panel

Hawaii takes the gold medal for lowest average auto loan balance, followed closely by Oregon. These states carry averages significantly lower than the national average of $5,680. But as explained, the auto loan balance is independent of ZIP code and rather relates to the economic circumstances of residents.

Financial literacy, income and cost of living all play important roles. When looking at the states with the lowest balances, for example, three out of the five hold some of the highest median household incomes in the country, according to the Census Bureau. Average credit scores also tend to be higher in these states.

Hawaii’s average FICO score is 732, falling under the good category, according to Experian. That’s higher than the national average credit score of 715. The remaining states carry similarly high averages.

The bottom line

No matter what state you call home, you can still secure a competitive auto loan rate by working to improve your credit score and shopping around with several lenders. While there are factors outside your control, such as vehicle price tags and current rates, the better your credit score is, the better your rates will likely be.

If you are struggling to find a monthly payment that you can afford, consider shopping for bad credit auto loans, which cater to those with little or no credit.