WalletHub study identifies
how states rank in delinquency

By Adam McCann
WalletHub financial writer

(April 25, 2024) Falling behind on debt payments can cause long-term credit score damage and cost you a lot of money. You'll rack up costly late fees even as your interest continues to build up. When it comes to auto loan debt, delinquency also has another dire consequence — after a long enough period of time, your car may even be repossessed.

In order to identify the states where auto loan delinquency is increasing the most, and thus where people’s vehicles are most in danger, WalletHub compared the 50 states using its proprietary user data on consumer delinquency rates between Q3 2023 and Q4 2023.

“When you are delinquent on auto loan debt, try to get your account current as soon as possible to minimize the consequences. If you pay fewer than 30 days late, your delinquency won’t be reported to the credit bureaus, though you’ll still likely owe a late fee. If you’re more than 30 days late, talk with your lender so they don’t start the process of repossessing your car while you figure out how to pay. Ask if your lender has a hardship plan, or try strategies like cutting other expenses or consolidating debt,”
said John Kiernan, WalletHub editor.

Auto loan delinquency is increasing the most in Washington, as the state’s residents were delinquent on 12.9% more auto loans in Q4 2023 than they were during Q3 2023.

The good news is that despite this big increase, Washington still has one of the lowest auto loan delinquency rates overall, with around 10.7% of borrowers behind on their payments.

People in Washington are also adding to their auto loan debt at a much slower rate than people in most other states, so that should hopefully minimize future increases in delinquency.

Alaska had the second-highest increase in auto loan delinquency from Q3 2023 to Q4 2023. Residents were behind on payments for 12.5% more auto loans in the fourth quarter.

In addition, Alaskans have the highest average auto loan debt in the country, which means that interest can easily spiral out of control while people are not making payments, especially when late fees are also applied.

Things haven’t gotten out of hand yet, however. Alaska ranks toward the middle of the country when it comes to auto loan delinquency rates overall, with around 12.6% of borrowers delinquent.

Auto loan delinquency in Oregon increased by 11.7% between Q3 2023 and Q4 2023, which ranks third nationally. However, Oregon still has a low auto loan delinquency rate overall. Around 10.3% of borrowers are behind on their payments, which beats all but three other states despite the recent increase.

People in Oregon should be cautious given the recent trend, but they probably aren’t in too much danger considering their total auto loan debt.

Auto loan delinquency by state

Methodology

To determine the states most delinquent on auto loans, we analyzed WalletHub’s proprietary user data on consumer delinquency rates between Q3 2023 and Q4 2023.