Auto delinquency rates increased by as much as 8.7 percent between Q3 2024 and Q4 2024 according to a recent study by WalletHub. Delinquency was on the rise throughout the U.S with all 50 states seeing an increase in the quarter.
Delinquent payments on auto loans can result in late fees, accumulating interest, credit score damage, and even vehicle repossession. WalletHub’s analysis of proprietary data highlighted where these issues are most pronounced.
Delaware, Kansas, and New Hampshire ranked as the top three states where auto loan delinquency rates increased the most during this period. Notably, Delaware experienced a rise of 8.7 percent, making it the state with the largest increase in past-due auto loans. Kansas and New Hampshire were not far behind with increases of 7.9 percent and 7.4 percent, respectively. However, unlike Delaware, these states have managed to maintain relatively low delinquency rates overall.
Delaware Leads in Rising Delinquency
With an 8.7 percent increase between Q3 and Q4 of 2024, Delaware residents experienced the most significant rise in auto loan delinquency of any state. Approximately 21.1 percent of auto loan borrowers in the state are currently behind on their payments, putting it at tied for fifth in the country with Georgia. However, Delaware is among the states that have seen a reduction in overall auto loan debt, which could lead to improving delinquency rates in the future.
Kansas, ranking second, saw a 7.9 percent increase in delinquency rates. Despite this increase, it retains one of the lower overall delinquency rates nationally at 14.6 percent. So while recent financial pressures are evident, the state’s low average auto loan debt, just 39th in the country, keeps the situation comparatively stable.
New Hampshire saw a 7.4 percent increase in delinquent auto loans, ranking third. Similar to Kansas though, only 14.5 percent of borrowers in the state are behind on payments. This gives it a notably low overall delinquency rate compared to other states, 41st overall. It also sits in the middle of the pack at 38th in total auto debt. While borrowers may be facing short-term challenges, the state’s overall financial health indicates no immediate issues.
States Where Overall Delinquency is Still High
While these three states stand out for their fourth quarter increases, there are still states that are struggling with delinquency at a more consistent rate. Mississippi has the highest amount of auto loan delinquency with 27.3 percent of auto loan tradelines delinquent in Q4, a number that was still up 5.1 percent over Q3 2024. Louisiana joins as the only other state with over a quarter of loan delinquent, sitting at 25.2 percent.
The top five is rounded out by North Carolina at 22.2 percent and Alabama at 21.5 percent with both states seeing increases of 5.1 and 6.8 percent respectively in Q4. So, while states like Kansas and New Hampshire may have had a particularly rough ends to 2024, other states are still overall in a more precarious place.
On the other side of the coin, states like Utah, Iowa and Idaho are in much better shape overall, all sitting around 11 percent in total auto loan delinquency. Still, all of those states saw an increase in delinquency in Q4 ranging from 2.1 to 5.7 percent.
Understanding the Bigger Picture
WalletHub’s findings underscore the importance of early intervention for managing auto loan delinquency. Borrowers who fall behind on payments are encouraged to act quickly to mitigate financial damage. To some extent, this national analysis reflects broader economic pressures and varying financial habits between states. However, while some areas experience higher rates of delinquency than others, it is still rising in all areas, something to watch as a tumultuous 2025 continues.
“When you are delinquent on auto loan debt, try to get your account current as soon as possible to minimize the consequences,” said WalletHub editor John Kiernan. “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.”
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