Americans are carrying a record amount of auto debt, with some cities having average car loan sizes that are almost an entire year’s income. According to a new analysis of 2,530 US cities by WalletHub, the city with the highest auto-loan debt relative to income is Rio Grande City, Texas.
The median auto-loan balance in Rio Grande City, Texas is $33,802, compared to a median annual income of $36,715, resulting in a 92 percent ratio. This is followed by Donna, Texas, with a median auto debt of $28,361 and a median income of $31,889, for an 89 percent ratio.
Pine Bluff, Arkansas comes in third, with a median loan balance of $34,206 and a median income of $40,227, resulting in an 85 percent ratio. These numbers are concerning, especially given that US auto-loan balances increased by $28 billion during the second quarter of 2026, reaching $1.71 trillion.
Cities with high auto debt are a major concern. WalletHub found that 170 cities have median auto-loan debt that equals at least half of residents’ annual income.
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In contrast, more than 680 cities had ratios of 25 percent or less. The study used March 2026 auto-loan data from TransUnion and 2024 income figures from the US Census Bureau.
It’s worth considering that the study divides each city’s median auto-loan balance by its median income for full-time, year-round workers, rather than measuring individual borrowers’ earnings versus debt. The results of the study highlight the financial pressure created by increasingly expensive vehicles and borrowing costs.
WalletHub analyst Chip Lupo warned that households carrying large car loans alongside other debts face an increased risk of falling behind on payments. As new-vehicle sales are forecast to decline 2.9 percent this year, affordability remains one of the industry’s biggest challenges.
The Federal Reserve has reported significant increases in auto-loan balances, which may be indicative of a larger issue. In the middle of this crisis, it’s clear that the automotive industry is facing significant challenges in terms of affordability and debt.
The fact that many cities have median auto-loan debt that exceeds half of their residents’ annual income is a sign of a broader problem that needs to be addressed. For instance, the city of Rio Grande City, Texas, has a median auto-loan debt that is nearly as high as its median annual income.
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This can lead to a situation where residents are struggling to make payments on their loans. The city’s residents may have to cut back on other expenses or even default on their loans, which can have a ripple effect on the entire economy.
The WalletHub study provides insight into the cities with the highest and lowest auto debt relative to income. The top three cities with the highest auto debt are Rio Grande City, Texas, Donna, Texas, and Pine Bluff, Arkansas.
The study’s findings are based on data from TransUnion and the US Census Bureau, and they provide a snapshot of the financial pressure faced by households in these cities. As the automotive industry continues to evolve, affordability and debt will remain major concerns for it.
They will need to find ways to make vehicles more affordable for consumers, while also ensuring that lending practices are sustainable. The industry’s ability to address these challenges will be critical to its long-term success.
