More consumers are struggling to keep up with car payments, with U.S. auto debt surging to $1.68 trillion in 2025—creating added challenges for dealers.
The details: Auto debt has climbed 37% since 2018, when total balances stood at $1.23 trillion, according to a new analysis from The Century Foundation and Protect Borrowers, provided exclusively to CNBC.
The average auto loan origination balance rose to $33,519 at the end of 2025, up from $24,782 in Q4 2018.
Over the same period, the typical monthly payment climbed to more than $680 from $506.
The groups estimate nearly 86 million Americans—roughly one in four—carry outstanding auto loan or lease debt.
What they’re saying: “People are seeing more and more of their paychecks eaten by their car payments,” said Angela Hanks, chief of policy programs at The Century Foundation, per CNBC.
Why it matters: Rising auto debt is adding pressure across dealership operations, from affordability and trade-in equity to lender approvals and deal structure, as more buyers stretch financially to stay in the market.
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Between the lines: The strain from growing vehicle debt is already showing up across financing and trade-in trends.
In Q4 2025, subprime borrowers reentering the market accounted for 15.31% of all vehicle financing, up from 14.54% a year earlier.
Loans lasting 84 months or longer now make up nearly 13% of new-vehicle financing, nearly double their 2019 share.
About 29.3% of trade-ins toward new-vehicle purchases carried negative equity in Q4 2025, the highest share since Q1 2021.
More than one-quarter of upside-down trade-ins involved at least $10,000 in negative equity, also a record.
Bottom line: Growing auto debt is reinforcing how dependent today’s market has become on longer loan terms and complex financing structures. For dealers, navigating affordability while keeping deals financeable will likely remain one of the biggest challenges in the current market.
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