Top 10 Cities in the US That Overspend on Cars
A recent study has revealed the cities with the most auto loan debt in the U.S.
Last year, auto sales in the U.S. declined for the first time in eight years, but auto loan balances have grown steadily over the past six years, according to the Federal Reserve Bank of New York’s latest report on household indebtedness. The report says auto loan balances have increased by another $23-billion in the third quarter of 2017.
SEE ALSO: Pros and Cons of Financing a Car
But to determine which cities overspend on cars, WalletHub divided the median car loan debt by residents’ income in each of the U.S. cities as of October 2017, based on TransUnion data. To determine the median income for each city, WalletHub based it on the 2016 earnings of individuals aged 16 and older who worked full-time year-round, according to the U.S. Census Bureau’s American Community Survey.
Although 30 cities rank in the 99th percentile in the study, we took the top 10 cities with the highest debt-to-income ratios.
10. Leesville, LA and Mercedes, TX (tie)
Tying for 10th place is Leesville, LA, and Mercedes, TX, both of which have a debt-to-income ratio of 69 percent. Leesville, however, has a median auto loan debt of $20,559 and income of $29,892 compared to Mercedes’s $18,559 median auto loan debt and $26,506 income.
8. Coachella, CA (tie)
With a median auto loan debt of $18,782 and income of $26,506, Coachella in California has a debt-to-income ratio of 71 percent.
8. Bastrop, LA (tie)
Bastrop, LA, is actually tied with Coachella, with a 71-percent debt-to-income ratio. The city has a median auto loan debt of $15,832 and income of $22,304.
7. Kingsville, TX
The second of six Texas cities on the list is Kingsville, with a median auto loan debt of $23,647 and income of $32,379. That results in a debt-to-income ratio of 73 percent.
6. Donna, TX
In Donna, TX, residents have a median auto loan debt of $20,598 and income of $27,891. That results in a slightly higher debt-to-income ratio of 74 percent compared to Kingsville.
4. Dahlonega, GA (tie)
Dahlonega in Georgia is next on the list with a 74-percent debt-to-income ratio from a median auto loan debt of $17,186 and income of $21,883.
4. Magnolia, TX (tie)
Like Dahlonega, Magnolia has a 74-percent debt-to-income ratio. Both median auto loan debt and income are higher than Dahlonega however, at $21,436 and $26,974, respectively.
2. Rio Grande City, TX (tie)
The next city from Texas on the list is Rio Grande City, with a debt-to-income ratio of 80 percent. Median auto loan debt comes in at $25,186 while income is $31,591.
2. San Juan, TX (tie)
With the same 80-percent debt-to-income ratio as Rio Grande City, San Juan is tied for second with a median auto loan debt of $23,110 and income of $28,811.
1. Lake Placid, FL
With a nine-percent jump to an 89-percent debt-to-income ratio, residents in Lake Placid are overspending the most on their cars. Median auto loan debt is $17,023 in the city, while income is $19,153.