Due to significant inflation, U.S. auto sales saw modest growth in 2024, rising just over 2% from 2023. Early forecasts predicted continued growth during 2025, with new vehicle sales potentially reaching the highest since 2019. However, recent tariff developments and economic uncertainty have cast doubt on that trajectory. Still, auto sales typically pick up after tax season, especially on Presidents’ Day weekend.
Despite the low growth in the auto market last year, consumer auto debt still increased significantly. According to the Federal Reserve Bank of New York’s latest report on household indebtedness, auto-loan balances increased by $13 billion in Q2 2025.
But not every city is alike. In order to determine where Americans overspend on their set of wheels, WalletHub compared the median auto-loan balance of more than 2,500 U.S. cities.
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 $32,173 while the median income is just $33,782. That means the ratio of residents’ auto loan debt to their income is 95%, 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.
Northglenn, CO
Northglenn, CO ranks second among cities where people overspend the most on cars. The median auto loan debt in the city is $50,124 and the median income is $55,715, which works out to a 90% auto loan debt-to-income ratio.
Keep in mind that for Northglenn 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.
Donna, TX
Donna, another Texas city, rounds out the top three cities where people overspend the most on cars, with a median auto loan debt of $27,828 and a median income of $31,203. 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 630 out of the more than 2,500 cities in our study have ratios of 25% or below.
Ask the Experts
Buying a car isn’t as straightforward as making everyday purchases. The former involves multiple steps and requires prior research, a reasonable budget and some negotiating skills. But buying isn’t for everyone, either. For guidance on the proper way to purchase or lease a car, we asked a panel of experts for their thoughts on the following key questions:
- What are the most common mistakes people make when shopping for a car?
- In what circumstances is leasing a smarter option than buying?
- Generally, what percentage of take home pay should go to car payments?
- What are your predictions for car sales in 2025? Should we expect to see an increase prompted by a lack of confidence in public transport, or less commuting due to more people working from home?
Ask the Experts
Professor of Economics, Barton College
Read More
Senior Instructor I | Personal Finance and Financial Planning - OSU-Cascades & Ecampus | College of Business
Read More
Accredited Financial Counselor (AFC), Program Manager & Instructor - Center for Advancing Financial Education, Oregon State University
Read More
Assistant Professor of Finance – Longwood University
Read More
Accounting Professor, College of San Mateo
Read More
Senior Instructor, Department of Economics - Loyola Marymount University
Read More
Methodology
In order to identify the cities with the highest and lowest car-loan debts, WalletHub divided the median car-loan debt by residents’ income in each of 2,530 U.S. cities as of March 2025, based on TransUnion data. The median income for each city is based on the 2023 earnings of individuals aged 16 and older who worked full-time year-round, according to the U.S. Census Bureau's American Community Survey. The figure excludes income from sources other than work. Our sample considers only city proper in each case and excludes cities in the surrounding metro area. A percentile rank of “99” represents the city with the smallest ratio of car-loan debt to income.
Sources: Data used to create this ranking were collected as of July 30, 2025 from the U.S. Census Bureau and TransUnion.
WalletHub experts are widely quoted. Contact our media team to schedule an interview.