Auto Loan Delinquencies Are On The Rise; These States Have The Most

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New Chevy Silverado vehicles for sale at a GMC Chevrolet dealership in Yuma, Arizona, US, on Monday, March 31, 2025. Photographer: Eric Thayer/Bloomberg via Getty Images

Late car payments are on the rise across the U.S., and Southern states are at the top of the list when it comes to delinquencies, according to a new analysis from LendingTree.

Analysts say it’s a concerning trend: despite stubborn inflation and high interest rates, unemployment rates are still low.

Why are late car payments increasing?

What they’re saying:

 “Auto loan payments are almost always a high priority for Americans because the vast majority of us need our vehicles to be able to get to and from work so we can make a living,” LendingTree chief consumer finance analyst Matt Schulz said. “When auto loan delinquencies are rising, it’s a likely sign that people are struggling. That’s no great surprise, given stubborn inflation, high interest rates and general economic uncertainty, but it’s still troubling, especially given that unemployment rates are still relatively low.”

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By the numbers:

LendingTree says overall, 5.1% of Americans are delinquent on at least one auto loan: 2% of borrowers were 30 days late on a payment, while 0.9% were 60 days late and another 0.9% were 90 to 120 days late.

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Overall loan balances are also decreasing, a sign that Americans could be getting fewer auto loans or borrowing less when they do. Federal Reserve data shows auto loan balances totaled $1.642 trillion in the first quarter of this year, a .8% drop from the previous quarter. It’s only the second time loan balances have dropped between quarters since 2011.

Southern states are the most behind

Dig deeper:

Almost all the states with the highest delinquency rates are in the South, with Mississippi and Louisiana at the top of the delinquency list.

Southern states typically have the lowest average credit scores, and combined with their lower incomes, it “often means lower financial margin for error in difficult times.”

Credit scores also play a role in average monthly payments: the lower the credit, the higher the payment.

What to do if you’re behind on car payments

What you can do:

LendingTree says if you are struggling to afford your monthly car payments, there are some steps you can take, including:

• Prioritize and track your spending: Schulz says a detailed budget will show you what you’re spending the most money on, and what changes you can make to make ends meet. 
• Ask for help: Call your lender and let them know you are struggling. They may have a temporary hardship program available to help. 
• Consider refinancing: If your credit score has improved or interest rates have dropped, you can look at refinancing to see if it will lower your monthly payments and reduce your total loan balance. Be sure to consider fees and the length of your loan before opting to refinance.  

States with the most delinquent car loan payments

1. Mississippi: 9.8%
2. Louisiana: 8.4%
3. Georgia: 7.8%
4. Alabama: 7.6%
5. South Carolina: 7.3%
6. Kentucky: 6.8%
7. Arkansas: 6.7%
8. Tennessee: 6.6%
9. Maryland: 6.4%
10. Oklahoma: 6.2%

States with the fewest delinquent car loan payments

1. Alaska: 3.2%
2. Utah: 3.2%
3. Washington: 3.2%
4. New Hampshire: 3.2%
5. Minnesota: 3.4%
6. Oregon: 3.5%
7. Idaho: 3.5%
8. Maine: 3.5%
9. Arizona: 3.6%
10. Hawaii: 3.6%