The auto debt crisis is squeezing Americans, with car payments devouring a growing portion of their paychecks. As of 2025, total auto debt hit a staggering $1.68 trillion, a 37% increase since 2018. This surge is fueled by rising vehicle prices, with the average new car costing nearly $49,000, a $12,000 jump in a decade. The supply of affordable cars has dried up, leaving buyers with limited options. This trend disproportionately affects low and middle-income families, who are taking on larger loans and facing higher interest rates. The average interest rate for new vehicle purchases reached 6.9% in the first quarter of 2026, while those with lower credit scores pay over 18%. This financial squeeze is forcing families to make difficult choices, stretching repayment terms and risking negative equity. The situation highlights the need for policy interventions to address the affordability crisis and protect consumers from predatory lending practices.
