A new report reveals that total auto debt in the U.S. reached $1.68 trillion by the end of 2025, marking a significant increase that places substantial financial pressure on American households.
Escalating Auto Debt Figures
According to an analysis by The Century Foundation and Protect Borrowers, the total outstanding auto debt—including traditional installment loans and leases—hit $1.68 trillion by the end of 2025. This represents a substantial 37% increase since late 2018, when the debt stood at $1.23 trillion.
Key statistics from the report include:
- Affected Population: Nearly 86 million Americans, or approximately one in four people, carry outstanding auto loan or lease debt.
- Loan Balance Growth: The average origination balance for an auto loan rose to $33,519 by the end of 2025, up from $24,782 in Q4 2018.
- Monthly Payments: The typical monthly auto loan payment increased to over $680, up from $506 during the same period.
Rising Costs and Affordability Crisis
The surge in debt coincides with rising vehicle costs and interest rates, forcing consumers to make difficult financial trade-offs.
Vehicle Pricing Trends
- New Car Prices: The average transaction price for a new vehicle is nearly $49,000, a significant jump from the $35,000 to $37,000 range seen in 2018.
- Affordable Options: Experts note that the supply of affordable new cars has diminished, with virtually no new vehicles currently listed for sale under $20,000.
- Income Disparity: Automakers are reportedly focusing on higher-income buyers; in 2017, 36 models were priced at $25,000 or less, compared to only four models today.
Impact on Borrowers
- High-Income Concentration: Over 43% of new cars are purchased by households earning $150,000 or more.
- Low-Income Burden: Low-income borrowers (earning under $35,000 annually) face higher relative payments, averaging $738 monthly, compared to the average payment. These borrowers also carried loan balances nearly $4,000 higher than high-income households.
Interest Rates and Payment Strain
Borrowers are contending with both higher monthly payments and increased borrowing costs.
- Interest Rate Increases: The average annual percentage rate (APR) for new vehicle purchases was 6.9% in Q1 2026, up from 6.7% at the end of 2025.
- High-Risk Rates: Consumers with lower credit scores (under 580) face interest rates exceeding 18%, which can accumulate significant costs, such as $14,000 in interest alone on a $30,000 loan over six years.
- Large Payments: The share of new vehicle purchases involving monthly payments of $1,000 or more rose to 20% in Q1 2026, up from 17% the previous year, indicating greater financial strain on many households.
