US Auto Loan Debt Hits Record 1.7 Trillion Dollars
American car buyers face record-high monthly payments and interest costs as total outstanding auto loan balances surpass national credit card debt.
Americans are facing record-high costs for new vehicle financing, with the average monthly payment reaching $787 in the third quarter of 2026. Data from Edmunds shows that 21.2% of new-car buyers now commit to monthly payments of at least $1,000. To manage these costs, 25.5% of new-vehicle purchases now carry repayment periods of 84 months or longer, pushing the average total interest paid over the life of a loan to a record $9,938.
Total outstanding auto loan balances have reached $1.713 trillion, surpassing national credit card debt. This financial strain is reflected in rising delinquency rates, particularly among non-prime borrowers. Data from Kübra indicates that 6.64% of non-prime auto loan borrowers were at least 60 days behind on payments in September. Additionally, nearly 30% of trade-in vehicles now carry negative equity, meaning they are worth less than the remaining loan balance.
Further risks are emerging for high-risk borrowers. Analysis from Breakingviews Limited warns that over 30% of subprime loans from early 2026 are scheduled to last until vehicles are more than 12 years old. This trend increases the likelihood of borrowers owning unreliable cars they cannot yet pay off. Meanwhile, the Federal Reserve Bank of St. Louis reported that average used-car loan interest rates reached 15.92% in June.
