Too Much Car, Too Little Income. The Road to Repo
WalletHub study finds auto-loan debt approaching — and in some cities nearly matching — annual income
A new WalletHub analysis provides another warning sign for the auto finance and repossession industries: In dozens of American cities, consumers are carrying auto-loan debt that represents an enormous percentage of their annual income.
WalletHub compared median auto-loan debt with median income in 2,530 U.S. cities, using TransUnion auto-loan data and U.S. Census Bureau income data. The results show just how heavily some consumers are financing their vehicles.
At the top of the list is Rio Grande City, Texas, where median auto-loan debt was $32,173, compared with median individual income of only $33,782. That puts auto-loan debt at approximately 95% of annual income.
Second was Northglenn, Colorado, where median auto-loan debt reached $50,124, compared with median income of $55,715 — approximately 90% of annual income.
Donna, Texas, ranked third, with median auto-loan debt of $27,828 against median income of $31,203, or roughly 89%.
And those aren’t isolated examples. WalletHub reports that in more than 160 cities, the average resident’s auto-loan debt is equivalent to at least half of their annual income. More than 630 of the 2,530 cities studied had ratios of 25% or less.
For repossession professionals, the significance isn’t simply that Americans are carrying more debt.
It is the relationship between vehicle debt, household income and the ability to absorb a financial disruption.
A vehicle may be essential to getting to work, but the payment is competing with housing, food, insurance, credit cards, personal loans and other expenses. When the vehicle itself represents half, three-quarters or nearly an entire year’s income, there isn’t much room for a missed payment before the situation becomes serious.
WalletHub itself points to the potential consequence, noting that consumers carrying expensive auto loans alongside other forms of debt are at risk of falling behind and having their vehicles repossessed.
That doesn’t mean every heavily financed vehicle will end up on a repo truck. It does, however, illustrate why payment distress can become a significant issue when borrowers have little financial cushion.
Other WalletHub research suggests the pressure on auto borrowers is continuing.
In its 2026 analysis of cities where auto-loan debt is increasing, WalletHub reported that Americans collectively hold approximately $1.7 trillion in auto-loan debt. Winston-Salem, North Carolina, led that study after average auto-loan balances increased more than 3.1% between the fourth quarter of 2025 and first quarter of 2026. Its average auto-loan balance reached $19,239, with an average monthly payment of $475.
That is particularly interesting for the repossession industry because rising balances don’t necessarily mean consumers are buying increasingly expensive vehicles with increasingly healthy incomes.
In some markets, borrowers may simply be financing vehicles for longer periods, carrying larger balances or replacing existing debt with new debt.
There is another point worth remembering.
A consumer driving a $50,000 vehicle isn’t necessarily wealthier than someone driving a $20,000 vehicle.
They may simply have more debt.
And from the perspective of a repossession agency, that distinction matters. The collateral may look valuable, but the borrower’s financial position may be considerably more fragile than the vehicle sitting in the driveway suggests.
For the recovery industry, statistics like these are another indicator of the financial pressure building underneath the automobile market.
The repo truck doesn’t see the household budget.
It sees the collateral.
But increasingly, the economics behind that collateral suggest that there may be plenty of borrowers who simply cannot afford the vehicles they are driving.
Source: WalletHub, U.S. Census Bureau, TransUnion. WalletHub’s analysis used March 2025 auto-loan data and 2023 full-time, year-round individual earnings.
