Auto Loan Debt Reaches a Record-High $1.43 Trillion

Quick Answer

Consumers owed a total of $1.43 trillion on the vehicles they drive in the third quarter of 2021, an increase of $78 billion over the previous 12 months. The average auto loan balance exceeded $20,000 for the first time ever.

Auto Loan Debt Reaches a Record-High $1.43 Trillion article image.

Among the goods and services that got more expensive in 2021, perhaps the most astonishing price hike of all was for automobiles. The average price of vehicles increased more than any other major category in the consumer price index, except for energy.

A seemingly perfect storm of several factors resulted in price hikes for all types of vehicles―and, by extension, increased the cost to finance a vehicle. Contributing causes include:

  • Pent-up demand: Consumers weren't driving as much during 2020, then suddenly were back on the road in 2021.
  • Increases in income: Stimulus checks and disruptions in the workforce changed consumption patterns for many.
  • Supply chain shortages: Many consumers were chasing a constrained supply of new vehicles due to parts shortages and shipping delays in 2021. These shortages also put a squeeze on the used car inventory.

Unless you're in the business of selling cars, the following analysis may not be the most cheerful reading. However, it will demonstrate how broad the demand for auto financing remains in the U.S., despite shifting routines in our everyday lives.

Auto Debt Climbs to Record High of $1.43 Trillion

Consumers owed $1.43 trillion on the vehicles they drove as of the third quarter (Q3) of 2021, according to Experian data, an increase of $78 billion over the prior year's data.

Snapshot: Overall Auto Loan Debt
2019 2020 2021 2020-2021 Change
Total outstanding auto debt $1.31T $1.35T $1.43T +$78B

Source: Experian data from Q3 of each year

The $78 billion increase in auto debt was nearly twice that of the $44 billion increase that occurred between Q3 2019 and Q3 2020. This accelerated growth mirrored the broader trends in consumer prices in 2021.

Average Auto Loan Balance Surpasses $20,000 Mark

After an increase of 1.5% from Q3 2019 through Q3 2020, average auto loan debt balances increased by 6.5% in the 12 months ending in Q3 2021, bringing the average balance above $20,000 for the first time.

Snapshot: Average Auto Loan Balance
2019 2020 2021 2020-2021 Change
Average auto loan balance $19,408 $19,703 $20,987 $1,284

Source: Experian data from Q3 of each year

Again, increasing balances are a reflection of what's occurring in the broader marketplace. According to Experian data, the average new vehicle loan amount increased by 8.8% to $37,746 from Q3 2020 to Q3 2021. The average used vehicle loan amount was even more pronounced, jumping by 20% to $26,230 over that same period.

Auto Delinquencies Remain Stable in 2021

As with other types of consumer borrowing, such as credit cards and mortgages, consumers have largely kept up with their loan payments despite the abnormal changes in employment and income. Measured in terms of the percentage of accounts that are past due by 30 days or more, delinquencies have barely budged since Q3 2020.

Auto Loan Delinquency Rates
Delinquency Period 2020 2021 Change
% of accounts 30-59 days past due 1.65 % 1.66% +0.01 percentage points
% of accounts 60-89 days past due 0.55% 0.55% No change
% of accounts 90-180 days past due 0.17% 0.18% +0.01 percentage points

Source: Experian data from Q3 of each year

Late payments, as might be expected, can depress a consumer's FICO® Score . In recent years, lower delinquency rates, not only in the automotive lending space but for other types of loans, partly explain the steady increases in the average FICO® Score in the U.S.

Auto Balances Rise for All FICO® Score Ranges

Average balances increased for all auto loan borrowers in 2021, with growth ranging from 5.4% to as much as 6.5%.

Average Auto Loan Balance by FICO® Score Range
2020 2021 Change
$16,418 $17,323 +5.5%
$20,180 $21,472 +6.4%
$21,525 $22,935 +6.5%
Very good
$20,259 $21,569 +6.5%
$18,357 $19,355 +5.4%

Source: Experian data from Q3 of each year

The highest average balances were for those with good credit scores, ranging from 670 to 739. Those with better or worse scores tended to have lower balances, though probably for differing reasons, such as greater down payments, differing loan length terms, type of vehicles financed and other variables.

Consumers in All States See Another Year of Increases in Auto Balances

For the second consecutive year, there was no letup in average auto balance increases among the states. Average increases ranged from 4% to 8% in 2021. In 2020, the increases were more modest—ranging from 2% to 6%. No states experienced balance decreases in 2020 or 2021, more evidence that the auto supply shortage isn't a localized phenomenon.

Average Auto Loan Balance by State
2020 2021 Change
Alabama $21,438 $22,769 +6.2%
Alaska $23,086 $24,325 +5.4%
Arizona $21,767 $23,245 +6.8%
Arkansas $23,067 $24,311 +5.4%
California $19,550 $21,027 +7.6%
Colorado $20,557 $21,593 +5%
Connecticut $16,083 $17,115 +6.4%
Delaware $19,216 $20,374 +6%
District of Columbia $17,333 $18,442 +6.4%
Florida $19,918 $21,341 +7.1%
Georgia $21,496 $22,958 +6.8%
Hawaii $19,858 $21,024 +5.9%
Idaho $20,694 $22,353 +8%
Illinois $18,907 $20,099 +6.3%
Indiana $18,568 $19,769 +6.5%
Iowa $19,713 $20,882 +5.9%
Kansas $20,014 $21,306 +6.5%
Kentucky $19,175 $20,554 +7.2%
Louisiana $23,517 $24,826 +5.6%
Maine $17,469 $18,824 +7.8%
Maryland $20,066 $21,228 +5.8%
Massachusetts $15,766 $16,864 +7%
Michigan $15,401 $16,560 +7.5%
Minnesota $17,864 $19,021 +6.5%
Mississippi $21,755 $23,121 +6.3%
Missouri $19,370 $20,473 +5.7%
Montana $20,937 $22,272 +6.4%
Nebraska $18,859 $20,102 +6.6%
Nevada $21,611 $22,876 +5.9%
New Hampshire $17,523 $18,610 +6.2%
New Jersey $16,110 $17,309 +7.4%
New Mexico $23,700 $24,837 +4.8%
New York $16,350 $17,498 +7%
North Carolina $19,944 $21,170 +6.1%
North Dakota $21,787 $22,622 +3.8%
Ohio $17,320 $18,411 +6.3%
Oklahoma $23,233 $24,317 +4.7%
Oregon $18,929 $20,171 +6.6%
Pennsylvania $17,473 $18,641 +6.7%
Rhode Island $15,391 $16,465 +7%
South Carolina $19,853 $21,005 +5.8%
South Dakota $19,672 $20,939 +6.4%
Tennessee $20,974 $22,307 +6.4%
Texas $24,665 $25,925 +5.1%
Utah $20,233 $21,560 +6.6%
Vermont $17,710 $18,708 +5.6%
Virginia $19,884 $21,035 +5.8%
Washington $20,504 $21,922 +6.9%
West Virginia $22,553 $23,465 +4%
Wisconsin $17,527 $18,670 +6.5%
Wyoming $25,474 $26,511 +4.1%

Source: Experian data from Q3 of each year

The acceleration was most pronounced in Idaho, where average balances shot up 8% in 2021. (Idaho is also currently experiencing a spike in average mortgage debt.) But even states with smaller average increases in balances, including North Dakota and West Virginia, still saw increases higher than 3%—which is more than balance increases in previous years

Although average auto loan amounts nationwide are now above $20,000, there's significant disparity among the states. In Texas and Wyoming, consumers now owe an average of more than $25,000 on their pickups, SUVs, sedans and other vehicles. At the more modest end of the spectrum, Massachusetts, Michigan and Rhode Island have average auto balances which are still lower than $17,000.

Young Generations Again Drive Auto Debt Growth

For the second consecutive year, millennials and Generation X (both of which travel more by car than other generations) had the largest average auto loan balances in 2021. The average auto loan balance for both millennials and Generation X exceeded $20,000 last year.

Average Auto Loan Balance by Generation
2020 2021 Change
Generation Z (18-24) $15,724 $17,241 +9.6%
Millennials (25-40) $19,011 $20,855 +9.7%
Generation X (41-56) $22,307 $23,855 +6.9%
Baby boomers (57-75) $19,306 $19,972 +3.4%
Silent generation (76+) $14,750 $15,063 +2.1%

Source: Experian data from Q3 of each year; ages as of 2021

Other Auto Financing Anomalies and What May Be in Store for 2022

While 2021 may be remembered as the year when eager buyers sometimes waited months to buy a car, 2022 may go down as the year when interest rates began to take an extra bite out of a car buyer's wallet. The Federal Reserve, which has already presided over four rate hikes so far in 2022, has signaled several more increases before the year is out. These increases are likely to have an impact on auto loan financing as well.

Nonetheless, the auto loan story is a bit different than that for mortgages, where even slight increases from historic rock-bottom rates in 2020 have already limited the purchasing power of many Americans. According to Zillow data, the average monthly payment for a new mortgage increased by nearly 36% from 2020 through April 2022.

While auto industry observers aren't expecting that kind of jump for average car payments, they do expect payments to continue to increase, a function of both a continuing shortage of available vehicles for purchase—new or used—as well as disappearing financing incentives for new vehicles. The "incentive spend" (discounts offered to new car buyers by the dealer) was only $1,000 per vehicle in April 2022, according to J.D. Power, an all-time low. The average discount a consumer could expect at the beginning of the pandemic was $3,000.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.