People are also reading…
U.S. auto sales had a good year in 2025, rising nearly 2% from 2024, and recording their highest annual sales volume since 2019. Forecasts predict that the market will decline during 2026, with new-vehicle sales expected to fall by 2.9% from 2025.
Alongside increased auto purchases naturally comes increased auto loan debt. Auto-loan balances have grown substantially over the past decade, increasing by another $28 billion in Q2 2026 to $1.71 trillion, according to the Federal Reserve Bank of New York.
To determine where Americans overspend on their wheels, WalletHub compared the median auto-loan balance and income in more than 2,500 U.S. cities.
“Many Americans are overspending on cars; in 170 cities, the average resident’s auto loan debt is the equivalent of half or more of their yearly income. Residents dealing with these expensive loans on top of debt from credit cards, personal loans, student loans and mortgages are at risk of falling behind on payments and having their vehicles repossessed. Buying less-expensive, used vehicles or saving up money to minimize loans can help prevent unsustainable auto loan debt.”
Chip Lupo, WalletHub Analyst
Prior to shopping for a new vehicle, we recommend prospective car buyers check their credit scores for free on WalletHub and use a Car Payment Calculator to determine an auto-loan payment and timeline they can afford.
Main Findings
Cities with the Most Auto Loan Debt
Note: *Highest Car Loan Debt-to-Income Ratio = 1st Percentile.
In Depth Look at the Top Cities
Rio Grande, TX
Rio Grande, TX, is the city where people overspend the most on cars because the median auto loan debt is $33,802 while the median income is just $36,715. That means the ratio of residents’ auto loan debt to their income is 92%, the highest in the country by a large margin.
Because of this, it’s no wonder that Rio Grande also ranks as one of the worst cities when it comes to money management skills.
Donna, TX
Donna takes second place, making Texas home to two of the top three cities where people overspend the most on cars, with a median auto loan debt of $28,361 and a median income of $31,889. In other words, the median auto loan debt is the equivalent of 89% of the median income.
While Donna’s auto loan debt-to-income ratio is a step down from Rio Grande’s, it’s still extremely high considering that over 680 out of the more than 2,500 cities in our study have ratios of 25% or below.
Pine Bluff, AR
Pine Bluff, AR, ranks third among cities where people overspend the most on cars. The median auto loan debt in the city is $34,206 and the median income is $40,227, which works out to a 85% auto loan debt-to-income ratio.
Keep in mind that for Pine Bluff and the other cities in this study, the debt-to-income ratio is only considering auto loans. Many residents likely carry debt from credit cards, personal loans, student loans and/or mortgages as well.
The methodology can be found on the full version of the article on WalletHub.
