Americans' auto debt reaches $1.68 trillion as payments top $1,000
Updated
Updated · CNBC · May 6
Americans' auto debt reaches $1.68 trillion as payments top $1,000
7 articles · Updated · CNBC · May 6
Nearly 86 million people hold auto loan or lease debt, while average loan balances hit $33,519 and monthly payments rose above $680 by end-2025.
In the first quarter of 2026, 20% of financed new-car purchases carried payments of at least $1,000, and average new-vehicle APRs rose to 6.9%.
Researchers said pricier vehicles, fewer affordable models and longer loan terms are squeezing low- and middle-income households, with some subprime borrowers paying rates above 18%.
As subprime auto delinquencies hit a 32-year high, is America driving toward a 2008-style crisis, but with cars instead of houses?
With affordable cars gone and used ones unreliable, how can Americans escape the auto debt trap without losing essential transportation?
If protectionist policies fueled this affordability crisis, could opening U.S. markets to cheaper foreign-built cars be the only way out?
Record $1.68 Trillion Auto Debt and 7.7% Delinquency Rate Signal Growing Financial Risk in U.S.
Overview
The U.S. auto loan market faces a crisis with record debt of $1.68 trillion driven by soaring vehicle prices near $49,000 and high interest rates averaging 6.9%. Longer loan terms, averaging 69 months with many extending beyond seven years, and monthly payments reaching $767 for new cars have created severe affordability challenges. These pressures have led to rising delinquency rates and nearly 30% of trade-ins being underwater, trapping borrowers in debt. Younger and subprime borrowers are especially vulnerable, facing higher costs and financial strain. This growing distress reduces consumer spending, risks job losses, and tightens future lending, posing significant risks to the broader economy.