Auto Loan Delinquency Is More Dangerous in These States
The inability to pay your auto loan may come with dire consequences. In some states, auto loan delinquency is getting worse, placing more cars in danger of being repossessed. Check out the states where the most people are falling behind on auto payments.
Which states have the highest rates of auto loan delinquency?
According to Wallet Hub, auto loan delinquency is growing all across the country. But some states are falling behind on auto loans more than others.
The top 10 states with the most auto delinquency include:
- Washington – 12.89%
- Alaska – 12.50%
- Oregon – 11.70%
- Georgia – 11.62%
- Rhode Island – 11.41%
- Oklahoma – 11.21%
- Delaware – 11.21%
- Utah – 11.6%
- West Virginia – 10.75%
- North Carolina – 10.29%
If you fall behind on your auto loan, then your lender can repossess your car without notice. Most lenders wait until you’re 90 days late to repossess vehicles, but they can do so after only one missed payment.
Missing payments provide negative marks on your credit, then a repossession will be recorded on your credit report, and defaulting on your auto loan makes it even worse.
In some cases, you may be sued to pay what you owe. Also, it could make it more difficult to get an auto loan in the future by increasing your rates.
Luckily, if you’re fewer than 30 days late, your delinquency won’t be reported, but you may still face a late fee.
Once you are 30 days late, contact your lender to discuss a payment plan before the repossession process starts. Ask your lender if they have a hardship plan or about refinancing. But you may have to cut expenses in other areas or consolidate your debt.
You can also sell your vehicle and use the funds to get something cheaper. Selling a vehicle yourself could be more beneficial than allowing your lender to sell it.
Inflation is making auto prices rise at tremendous rates. The nation has about $1.3 trillion in auto loan debt. The average household owes over $13,400 as of the third quarter of 2023.
In the states with the largest increases in delinquency, people may be agreeing to payments that they can’t afford.
