(19 October 2026 – United States) The United States US$1.7 trillion automotive loan market is at risk of crashing with 1 in 5 Americans falling behind on at least one loan, representing the highest level since the Global Financial Crisis in 2010.
Stephen Gandel reports for Reuters that auto loans are now one of the largest sources of household debt, exceeding even credit cards, as the average on-road US car is now aged over 13 years to hit a fresh record high. Aggregate total auto debt has surpassed US$1.68 trillion, a 37 percent jump since early 2018 to now comprises the largest volume of outstanding loan debt ever recorded.
Generous stimulus measures and supply chain disruptions resulted in car prices surging during the pandemic, forcing buyers to take on more debt to finance automotive purchases. The average monthly instalment has increased from US$550 in 2019 to US$765 now in the absence of pandemic-era government incentives and stimulus cheques.
Auto loans approved during the COVID pandemic years from 2020 to 2023 are recording late payments at alarming rates as buyers are left with depreciating assets costing them much more than they can afford.
“Another driver of surging auto loan debt is higher interest rates, which increase the overall cost of a loan and eat into a family’s ability to pay down their debt on a monthly basis. Today, the average annual percentage rate (APR) for auto loans is nearly ten percent, up from 7.5 percent in 2018” stated Century Foundation Fellow Laura Valle Gutierrez.
“If the whole affair comes crashing down, it would have a devastating effect on the auto industry at a time when it’s already under immense pressure. And the ripple effects would certainly go beyond the automotive sector, because a severe downturn in a market worth US$1.7 trillion isn’t something the rest of the economy can shrug off like it’s no big deal” commented CarBuzz Author Silvian Secara.
“Of course, the consequences wouldn’t be as drastic as those brought about by the GFC, but they really shouldn’t be underestimated, either. The worst thing about this whole predicament is that we might be past the point of no return, too late to course-correct and left with no choice but to brace for the inevitable. Let’s hope that’s not the case, though.”