Falling behind on debt can have serious long-term consequences, and auto loans are no exception. As missed payments rise across the U.S., WalletHub’s latest data reveals which states are seeing the steepest jumps in auto loan delinquency rates. The findings highlight regions where financial stress is mounting—and where borrowers may face repossession risks if trends continue.
Top 10 States Where Auto Loan Delinquency Is Growing Fastest
According to WalletHub’s analysis of Q3 to Q4 2024 data, these are the top 10 states with the largest increase in auto loan delinquencies:
| Rank | State | Delinquency Rate (Q4 2024) | Quarterly Increase |
|---|---|---|---|
| 1 | Delaware | 21.11% | +8.77% |
| 2 | Kansas | 14.61% | +7.89% |
| 3 | New Hampshire | 14.47% | +7.41% |
| 4 | Montana | 14.69% | +7.36% |
| 5 | Oklahoma | 15.82% | +7.21% |
| 6 | Colorado | 14.78% | +6.92% |
| 7 | Washington | 13.22% | +6.86% |
| 8 | Alabama | 21.52% | +6.82% |
| 9 | Massachusetts | 14.73% | +6.75% |
| 10 | Arizona | 16.52% | +6.46% |
“If you’re more than 30 days late, talk with your lender so they don’t start the process of repossessing your car,” says John Kiernan, WalletHub Editor. “Ask if your lender has a hardship plan or try strategies like cutting expenses or consolidating debt.”
Why Auto Loan Delinquency Is Rising
Several factors are contributing to this surge in auto loan delinquency:
- Rising Interest Rates: Higher APRs on new loans are increasing monthly payments.
- Stagnant Wages: Income growth has not kept pace with inflation and cost-of-living increases.
- Inflation Pressure: Groceries, gas, and utilities are eating into budgets, leaving less room for debt repayment.
- Vehicle Price Bubble: High auto prices during the pandemic led many buyers to finance larger-than-average loans.
Spotlight: Delaware, Kansas & New Hampshire
- Delaware saw the sharpest rise (+8.77%) and now has one of the highest overall delinquency rates at 21.11%.
- Kansas, despite its low average auto loan balances, had the second-largest increase (+7.89%), suggesting growing financial strain rather than loan size as the issue.
- New Hampshire’s rate rose 7.41%, but it still maintains one of the lowest overall delinquency rates in the U.S., showing early signs of trouble but not yet a crisis.
The Bigger Debt Picture
While some states are managing to reduce overall auto loan debt, the uptick in missed payments signals that many households are overextended. Repossession risk looms if delinquencies exceed 60 to 90 days.
Tips to Stay Ahead of Auto Loan Debt:
- Prioritize essential bills like auto loans.
- Contact lenders early if you expect to miss a payment.
- Look into hardship programs or loan modifications.
- Consider refinancing or debt consolidation to lower payments.
What This Means for Borrowers
If you’re living in one of the top 20 states listed in the report, it’s time to review your finances and take action. Even one missed payment can impact your credit score—and worse, cost you your car.
Stay informed, act early, and talk to lenders before delinquency spirals into default.
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