States With the Most Car-Poor Drivers

The 10 states with the most car-poor drivers

In our analysis, a stark regional trend emerged: Nine of the 10 states with the most car-poor drivers are in the South. In eight of these states, drivers report monthly car payments that are higher than the national median.

The common denominator in the financial burden for car owners in the South is low income. Self-reported incomes in the worst-ranked Southern states range from $48,000 to $51,000 a year — as much as 11% below the median income among drivers with loans who expressed interest in refinancing. When money coming in is limited, motorists can feel the pinch of every dollar that goes toward a car loan payment.

Check out the map below to see where Americans report the most costly car payments. Then, keep reading for a closer look at the states where motorists report struggling the most.

1. Mississippi

Car owners in the Magnolia State are most pressured by car payments, according to our analysis. Mississippi motorists seeking to refinance report spending 16.8% of their income on car payments — one of the highest rates in the nation. To put it in perspective, this is the equivalent of putting more than $1 out of every $6 you earn toward your car note.

Drivers also report one of the highest median annual percentage rates (APR) in the country, at nearly 15.6%.

Mississippi is also home to some of the most delinquent car loans in the country. According to the Federal Reserve Bank of New York, almost 8% of auto debt in the state is 90-plus days overdue, versus just over 5% nationwide. 

Having high car payments isn't the only tough pill for Mississippi motorists to swallow. The state also has some of the worst roads in the nation.

Consumers report the following key metrics:

• Median car payment: $670 per month (sixth highest)
• Share of reported income spent on car payments: 16.75% (second highest)
• Median APR: 15.57% (third highest)
• Median loan term: 75 months (fifth longest)

2. West Virginia

Scoring just behind Mississippi is West Virginia. Car owners looking to refinance in the Mountain State report steep monthly payments, but the state stands out most in the length of auto loans. Drivers report a median term of 81 months — the longest in the U.S.

West Virginians do appear to have APRs on the lower side. The median is 12.5%, which ranks 32nd. However, motorists report some of the nation’s lowest incomes (median of $48,000), so a lower rate isn’t enough to keep them from feeling financial stress.

Consumers report the following key metrics:

• Median car payment: $650 per month
• Share of reported income spent on car payments: 16.25% (seventh highest)
• Median APR: 12.51%
• Median loan term: 81 months (longest)

3. Alabama

Drivers in the Yellowhammer State have the third-worst auto loan burdens. The median income among car owners interested in refinancing, $4,000 per month, is about 11% below the national median. As in many Southern states, lower incomes compound the effects of high car payments and APRs.

Ultimately, a staggering 67% of Alabama drivers, the highest percentage in the U.S., report being severely cost-burdened by their car payments, spending 15% or more of their income on car loans. 

Consumers report the following key metrics:

• Median car payment: $670 per month (sixth highest)
• Share of reported income spent on car payments: 16.75% (second highest)
• Median APR: 15.25% (fourth highest) 
• Median loan term: 75 months (fifth longest)

4. New Mexico

Among the 10 states with the most car-poor drivers, New Mexico is unique. It’s the only state that’s not in the Southern U.S. Drivers looking to refinance in New Mexico report slightly higher incomes (median of $51,000) than eight of the nine others.

Borrowers looking to refinance in New Mexico report a median car payment of $690 — that’s the third highest in the country, and the highest among the top 10 states. New Mexico also ranks third worst for the share of borrowers paying $1,000 or more a month, at 16.4%.

The financial weight of owning a car may not be the only thing frustrating New Mexicans. The state ranks second worst for road rage.

Consumers report the following key metrics:

• Median car payment: $690 per month (third highest)
• Share of reported income spent on car payments: 16.24% (eighth highest)
• Median APR: 14.23%
• Median loan term: 75 months (fifth longest)

5. North Carolina

In the Tar Heel State, drivers looking to refinance report a median monthly car payment that is actually slightly below the U.S. number. However, they also have a median income of $48,000 (second lowest), so their car payments still amount to about 16% of their income, a sizable share.

If there’s any good news, it’s that the average FICO score in North Carolina is the highest among the 10 states that rank worst in our analysis. That could make it slightly easier for cost-burdened car owners to qualify for more favorable refinancing terms.

Consumers report the following key metrics:

• Median car payment: $630 per month
• Share of reported income spent on car payments: 15.75% (10th highest)
• Median APR: 15.12% (fifth highest)
• Median loan term: 75 months (fifth longest)

6. South Carolina

Drivers seeking to refinance their car loans in the Palmetto State face significant financial headwinds. They have one of the highest median monthly car payments in the country ($660), thanks in part to a high median APR (14.85%).

The data isn’t all speed bumps and potholes, though. The median loan term is 72 months, tied for lowest with 25 other states. 

Consumers report the following key metrics:

• Median car payment: $660 per month (ninth highest)
• Share of reported income spent on car payments: 16.5% (fifth highest)
• Median APR: 14.85% (seventh highest) 
• Median loan term: 72 months

7. Oklahoma

Motorists considering refinancing in Oklahoma, with a median reported annual income of just $48,000 and car payment of $640 monthly, are putting 16% of their income toward their automotive debt — the ninth-largest cost burden of all states.

The median reported APR in the Sooner State is one of the 15 highest in the U.S., and the median loan term is fifth longest.

Consumers report the following key metrics:

• Median car payment: $640 per month
• Share of reported income spent on car payments: 16% (ninth highest)
• Median APR: 13.91%
• Median loan term: 75 months (fifth longest)

8. Tennessee

Car owners thinking about refinancing report high APRs on existing car loans, contributing to high monthly payments that take a big bite out of their monthly income. The cost burden of 16.5% of earnings going to car payments is the fifth highest in the U.S. More than three in five drivers are spending over 15%, one of the highest rates in the country.

However, a relatively small share of Volunteer State residents are spending more than $1,000 a month on their wheels — just over 9%, which is 12th lowest overall. 

Consumers report the following key metrics:

• Median car payment: $660 per month (ninth highest)
• Share of reported income spent on car payments: 16.5% (fifth highest)
• Median APR: 14.42% (10th highest) 
• Median loan term: 72 months

9. Louisiana

Louisiana cruises into ninth place, with borrowers facing some of the heaviest car payment burdens in the country. Those looking to refinance in Louisiana are spending 16.75% of their income on auto payments — tied with Mississippi and Alabama for the second-highest share nationwide. 

Supplementary data from the New York Fed shows heavy borrowing among drivers. Louisiana is tied with New Mexico for the nation's second-highest per-capita auto debt balance, at $7,000, 24% above the national average.

Consumers report the following key metrics:

• Median car payment: $670 per month (sixth highest)
• Share of reported income spent on car payments: 16.75% (second highest)
• Median APR: 13.70%
• Median loan term: 72 months

10. Georgia

The high median reported APR on car loans in Georgia is the biggest component in the state’s 10th-place finish. Those exploring refinancing report a median rate of 15.65%, second highest in the U.S. Additional data from the New York Fed shows that 7% of auto debt in the state is 90-plus days overdue — the third-highest rate nationwide.

A monthly car payment isn’t the only automotive expense that Peach State residents struggle with. High insurance premiums and repair costs make Georgia one of the most expensive states for car ownership.

Consumers report the following key metrics:

• Median car payment: $660 per month (ninth highest)
• Share of reported income spent on car payments: 15.53%
• Median APR: 15.65% (second highest) 
• Median loan term: 72 months

States where $1,000 car payments are most common

Among people who want to refinance their auto loans, the median monthly car payment is $640. That’s no small expense, but many Americans pay much more.

“In today’s market, it is not unusual to see vehicle payments exceeding $1,000 per month,” said Ashley Morgan, a debt and bankruptcy lawyer in northern Virginia. “In some cases, the car payment is actually higher than what someone pays for rent or housing.”

Pete Wright, the chief marketing officer at Auto Approve, noted that 19% of new car loans today have monthly payments of $1,000 or more. “If you are in that territory on a median income, the math almost certainly does not work,” he said.

Alaska and North Dakota have the largest shares of respondents paying more than $1,000 a month for their cars (16.5%). That’s a greater share than in states that tend to have higher costs, like California and New York. (In fact, North Dakota has the lowest cost of living in the country.)

Still, Alaska and North Dakota rank in the bottom third of states overall, suggesting that it’s not just a car’s purchase price or the monthly payment that matters — a borrower’s broader financial situation determines how manageable those costs are.

Check out the map below to see which states have the highest percentage of people spending $1,000 or more on their car payments.

How car payment affordability varies across America

The size of a car payment is a meaningful metric, but it’s only one piece of the puzzle. Our methodology draws on a number of key indicators to determine how each state ranks.

High rankings may be driven by larger payment burdens, higher APRs, longer loan terms or a combination of all three. But if there’s one factor that seems to tie together the states at either end of the list, it’s income.

The states with the least affordable car loans tend to be in the South and have median reported incomes below the overall median. Meanwhile, the states where borrowers are the least strained are geographically mixed and have reported median incomes all above the overall median — by anywhere from 5% to 22%.

Minnesota is where auto loan borrowers are least financially squeezed. Minnesotans thinking about refinancing report making a median car payment of $610 (12th lowest) with a median monthly income of $5,000 (third highest). The median APR they pay is 10.77% is eighth lowest. (Minnesota residents have the highest average FICO score in the U.S.)

Curious about the rankings as a whole? Check out the data table below.

How car payments become costly

Understanding how buyers end up with expensive auto loans often starts with how deals are structured at the dealership. “Almost always, it comes down to focusing on the monthly payment instead of the total cost of the loan,” said Wright. “Dealerships are skilled at anchoring buyers on ‘can you afford $X per month?’ which shifts attention away from the interest rate, term length and total interest paid.”

Meanwhile, the dealership might mark up the rate from what the lender originally approved, Wright said — even for borrowers with strong credit. “The dealer gets paid on that spread, so a buyer who qualifies for 5% may drive off the lot at 7% or 8% and never know the difference,” he said.

Costs can rise quickly when buyers finance the full sticker price with nothing down, roll in negative equity from a trade and add warranties and gap insurance to the loan. “By the time everything is bundled in, the payment reflects a number well above the car’s actual value,” Wright said.

What to do if your car payment is too high

Does your car note have you struggling to make ends meet? You’re not alone — and you aren’t without options, even if it seems like your budget is stuck in park.

“If you're carrying credit card balances because of your vehicle, overdrafting your account, putting off maintenance or living paycheck to paycheck because of the car, the payment is too high,” said Ashley NeSmith, an automotive industry veteran and founder of Ashley the Auto Advocate, an automotive concierge service.

Check out these tips for relief from a painful car payment:

1. Take stock of the situation

“If someone realizes their car payment is too high, the first step is honestly evaluating the situation,” said Ashley Morgan, a debt and bankruptcy lawyer in northern Virginia. “Is the issue temporary or long-term? A temporary income reduction may call for a different solution than a vehicle that simply never fits within the budget.”

Wright recommends starting with a thorough audit, including reviewing the interest rate, remaining balance and payoff date on your loan statement. “Many people who financed in 2022 or 2023 have since built stronger credit through consistent payments and don’t realize they likely qualify for a better rate today” through a refinance, he said.

2. Explore your options for refinancing

Refinancing usually makes the most sense when your credit has improved, interest rates have become more favorable, or both, said NeSmith. To start, evaluate your equity position. “The earlier you are in the loan, the more a lower interest rate can help because most of the interest is paid during the earlier years of repayment,” she said.

According to Wright, borrowers who refinanced in the second quarter of 2025 lowered their interest rate from an average of 10.45% to 8.45%. He said refinancing tends to make the most sense starting 10 months after loan origination.

3. Investigate other ways to save

While refinancing is a solid option for some, a lower payment isn’t always a better deal if you’re extending the loan and paying more interest overall. “Beyond refinancing, consumers may have other options,” said Morgan. “Selling the vehicle, trading into a less expensive vehicle, negotiating other expenses in the budget, increasing income or restructuring other debt may all help.”

Wright cautions that some options carry serious consequences. “Voluntary surrender or repossession should be absolute last resorts,” he said. “The credit damage they create constrains your financial options for years.”

4. Consider waiting — but don’t wait too long

“A few years ago, it wasn't unusual to see well-qualified buyers financing vehicles with interest rates that seem almost impossible today,” said NeSmith. “I think affordability will improve eventually, but I don't expect a return to the rock-bottom rates and pricing we saw before the pandemic.”

How to calculate how much car you can afford

Want to be smart about buying a new vehicle? Our experts’ advice: Begin with your budget, not your dream car.

“Just because a lender approves you for a certain amount doesn't mean you should borrow that amount,” NeSmith said. “In my experience, the happiest buyers are usually the ones who leave themselves room in their budget instead of stretching to the maximum they qualify for.”

According to Wright, your total transportation costs, including the car payment, insurance, gas and maintenance, should be no more than 15% to 20% of your take-home pay. “If the payment alone is pushing past 10% to 15% of net income, that is a warning sign,” he said.

Remember that lenders determine whether they are willing to take on the risk of offering you a loan, not whether that loan comfortably fits into your financial life. “Being approved for a vehicle and being able to comfortably afford the vehicle are two very different things,” Morgan said. “A car payment should support your financial life, not control it.”

Whether you’re evaluating an existing car loan or embarking on a new car buying journey, use our interactive car payment calculator below to find out what you can truly afford.

Methodology

ConsumerAffairs partnered with Auto Approve, an auto loan refinancing company, to identify the states with the most car-poor drivers.

The analysis is based on data from 38,064 people who submitted information through Auto Approve's website between Nov. 1, 2024, and May 14, 2026. Borrowers represented all 50 states and Washington, D.C. After outlier removal, state-level sample sizes ranged from 285 to 999.

We included three individually weighted metrics in our analysis. For each metric, the state with the highest value received the maximum number of points, with other states earning relative scores. We then added the scores to get an overall score out of 100 points. Higher scores reflect a combination of higher monthly payments relative to income, higher APRs and longer loan terms.

• Car payment cost burden (50 points): This score is based on the share of median reported income taken up by the median monthly car payment. States with higher percentages received higher scores.
• Median APR (25 points): This score is based on the median reported APR. States with higher median rates received higher scores.
• Median loan term (25 points): This score is based on the median reported loan term. States with longer median loan terms received higher scores.

For additional context, ConsumerAffairs analyzed other data points, including the share of borrowers with monthly car payments consuming at least 15% of their self-reported income and the share with payments exceeding $1,000. We also researched state-level data including average FICO scores, auto debt balances per capita and serious auto debt delinquency rates. These were not included in the overall ranking.

Reference policy

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Questions?

For questions about the data or if you'd like to set up an interview, please contact jrodriguez@consumeraffairs.com.