Auto loan interest rates in the US are down during the COVID-19 pandemic. But where will this translate to the greatest savings? doxoINSIGHTS’ research breaks down the amount that U.S. households pay for the average car loan. doxo’s U.S. Auto Loans Market Size and Household Spending Report analyzes the numbers, both in terms of overall market size and average cost per household at both the monthly and annual levels.
The report also contains rankings among all 50 states, 25 major metro areas, and more than 300 smaller cities and towns in the country, showing how average car loan payments compare in different places across the country.
doxoINSIGHTS industry report: U.S. Auto Loans Market Size and Household Spending Report 2021
Download full report here.
Check the full report for additional details on national bill payments, and how much car loans cost in comparison to other regular expenses, like utilities, rent, cable and internet, mobile phone costs, and five more key household bill pay categories. It also breaks down the scale of the auto loan industry market size: $463 billion spent in the US per year on the bill category, out of the $4.4 trillion total that Americans spend on household bills.
How much is the average car loan payment in the US?
doxoINSIGHTS’ report on the auto loan industry reveals that the average American household spends $412 a month on car loan payments. Also, 73% of households pay a monthly auto loan bill in the first place. This brings the average annual auto loan cost per US household is $3,605.
Car Loan Costs for the Average US Household
|Average Monthly Car Loan Bill||% of Households w/ Car Loan Bill||Average Annual Car Loan Expenses per HH|
Below, see a breakdown of car loan costs across the most and least expensive states, 25 major metro areas, and 374 smaller cities and towns.
Wyoming is the most expensive state for average car loan payments
Wyoming tops the list of the most expensive states for car loan costs, with an average monthly bill of $559. This is far and away the highest average auto loan expense out of all 50 states and the District of Columbia. Alaska comes in second place, at $485 per household.
Both states receive heavy snowfall in the winter, as do North Dakota and Massachusetts, which are also in the top 5 most expensive states for auto loans. This likely contributes to the high car loan payment average. Individuals who often drive in inclement weather are more likely to purchase large, sturdy vehicles that are costlier than small ones.
Incidentally, Wyoming and Alaska are also the most expensive states for car insurance payments. This is likely because of weather factors as well. Car insurance companies generally receive more claims in areas with inclement weather, which may drive up premiums.
5 Most Expensive States for Auto Loans
|Rank (1-51)||State*||Average Monthly Bill||% of Households w/ Bill||Average Annual Expenses per HH|
*From rankings of all US states + the District of Columbia. See full report, page 11 for complete state rankings.
States located in the Midwest and the Eastern Seaboard make up the list of the most affordable states for car loans. Maryland auto loan expenses are the lowest, at $333 a month on average, followed by Pennsylvania, at $338 a month. Next come Delaware, at $352 a month, followed by Indiana ($355) and Ohio ($357).
5 Most Affordable States for Auto Loans
|Rank (1-51)||State||Average Monthly Bill||% of Households w/ Bill||Average Annual Expenses per HH|
Portland is the most expensive major metro for car loans
In contrast, none of the five most expensive major metros for car loans is located on the East Coast. Portland, Oregon finishes first, at $468 per month. Houston, Texas comes next, at $466, followed by Denver ($464), Los Angeles ($451), an Atlanta ($449).
The prevalence of car loans per total number of households also varies widely among major metros. While houses in Houston pay a car loan in 72% o cases, those in Portland only pay an auto loan 56% of the time.
5 Most Expensive Major Metros for Auto Loans
|Rank (1-25)||Metro||Average Monthly Bill||% of Households w/ Bill||Average Annual Expenses per HH|
The least expensive major city for auto loan expenses is Pittsburgh, where residents pay $331 per month on average for the average car loan. Washington DC comes in second place, at $353 per month, more than $20 more expensive than PIttsburgh. Cleveland follows Washington DC, at $357, while Columbus comes next with $370. Philadelphia is number 5 on the list of most affordable, at $372 per month.
Also refer to doxo’s op-ed in CBT News for a more detailed look at the share of household income that residents of different metros pay for car ownership costs (auto insurance plus auto loans). Orlando and Miami, for instance, are at the top of the list of the cities where residents spend the highest proportion of their income on car ownership.
5 Most Affordable Major Metros for Auto Loans
|Rank (1-25)||Metro*||Average Monthly Bill||% of Households w/ Bill||Average Annual Expenses per HH|
Harrisonburg, VA is the most expensive smaller city for car loans
Among the smaller cities and towns ranked by doxoINSIGHTS, Harrisongburg, Virginia takes the spot as the most expensive city for car loans. Residents of Harrisonburg can expect to pay an average $736 in car loans. In a distant second place is Greeley, Colorado, where residents make average monthly car loan payments of $635. Paducah, Kentucky, follows, at an average monthly payment of $616. Next comes Eureka, California, where car loan payments are $615 on average. Fifth on the list of the most expensive cities is Lawrence, Kansas, where residents can expect to pay an average of $614 per month.
5 Most Expensive Smaller Cities for Auto Loans
|Rank (1-374)||City / Town*||Average Monthly Bill||% of Households w/ Bill||Average Annual Expenses per HH|
5 Most Affordable Smaller Cities for Auto Loans
The most affordable smaller city at the bottom of the rankings is Cumberland, Maryland. In Cumberland, residents can expect to pay an average of $226 per month on car loans. Albany, Oregon follows, also at $226. Reading, Pennsylvania and Jackson, Tennessee come in third and fourth, at $260 per month on average. Fifth most affordable is Lynchburg, Virginia, where residents can expect to pay $266 per month.
|Rank (1-373)||City / Town*||Average Monthly Bill||% of Households w/ Bill||Average Annual Expenses per HH|
Market size and more: the scale of the industry
The full Auto Loan report contains more detailed data as well, including industry market size rankings in all the different geographical divisions broken down above. Also, see more details on how car loan spending stacks up in comparison to other household bill costs, such as utilities, cable and internet, and mobile phone.
During the COVID-19 pandemic, some people may require assistance trimming regular expenses in order to save money. doxoINSIGHTS’ report can be a valuable resource for consumers seeking to make decisions like this, allowing them to compare average expenses in different cities and states. They can also use doxoINSIGHTS’ regional bill comparison database to compare average costs for over 900 towns and cities across the country.
The numbers from the full Auto Loan report are drawn from anonymized data from doxo’s 6 million users paying over 100,000 billers across more than 30,000 zip codes in the United States. Read more about doxoINSIGHTS’ methodology here.
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