Americans have $1.68 trillion in auto debt. How much do North Carolinians owe?
AI-generated summary reviewed by our newsroom.
- More than 2.8 million North Carolinians had auto loan debt at the end of 2025.
- The average auto loan balance in North Carolina was about $25,303 at the time.
- Cars are getting more expensive, and buyers should know they can negotiate with dealers.
Gas prices may have started to settle down, but many North Carolinians are still spending a lot on cars.
More than 2.8 million people in the state had auto loan debt at the end of 2025, according to an analysis from progressive think tank The Century Foundation and consumer advocacy group Protect Borrowers. Using the U.S. Census Bureau’s American Community Survey estimate of just over 11 million North Carolinians in 2024, that means about one in every four people in the state had auto loan debt at the end of last year.
Their average loan balance was about $25,303, the analysis found, up more than 25% since 2018.
North Carolinians aren’t unique in this trend. Auto debt in the United States, including traditional loans and leases, reached $1.68 trillion at the end of last year, the analysis found. That’s about $450 million more than in late 2018, according to CNBC.
Almost 86 million Americans, or about 25% of the population, carried outstanding auto loan or lease debt at the end of 2025.
Auto debt in NC
Here’s another way to look at how much auto debt North Carolinians have.
According to data from the Federal Reserve Bank of New York, the auto debt balance per capita was $5,980 in North Carolina at the end of 2025. That number, which factors in people who have no auto debt, was greater than the credit card debt balance per capita ($4,160) and student loan debt balance per capita ($5,630) in North Carolina at the time.
Compared to other states, North Carolina’s auto debt balance per capita was relatively high — nearly among the top third.
The state with the highest auto debt balance per capita, $8,000, was Texas, where everything’s bigger. Residents of Washington, D.C. had the lowest auto debt per capita, $3,350. Hawaiians had slightly more, $3,990.
The amount of debt North Carolinians have been carrying has increased over time, according to the New York Fed data. At the end of 2003, the debt balance per capita was $3,090, or $2,890 less than in 2025. Adjusting for inflation, that $3,090 was worth about $5,408 in 2025. More people are now living in North Carolina, though, with the state’s population increasing from about 8.4 million in 2003 to more than 11 million in 2024.
Why is auto debt increasing?
Several factors are making buying cars more expensive, said Lucia Constantine, a senior researcher at the Durham-based Center for Responsible Lending.
In recent years, vehicles have become pricier, thanks to the COVID-19 pandemic and resulting supply chain issues, not to mention new tariffs implemented by the Trump administration, Constantine said. Cars also incorporate more technology than before, which adds to costs.
“We also know that the relationship between dealers and lenders really increases the cost of the transaction for consumers who come into the purchase not knowing a lot about the condition of the vehicle or the terms of the financing they will receive,” Constantine said.
Dealers often work with one or more lenders and arrange financing on behalf of car buyers. These loans make up 80% of all auto loans in the U.S., according to a 2023 article for the Federal Reserve Bank of Chicago.
In return, dealers are compensated for originating the loan through a markup, Constantine said. According to the Chicago Fed article, a typical contract between a dealer and lender caps the markup at between 2 and 2.5 percentage points.
“They exert a lot of control over the financing transaction,” she said.
How higher car payments affect NC consumers
Cars are essential purchases for many North Carolinians, Constantine said, who need them to get to work, take their kids to school or just go about daily life.
And as cars become more expensive, budgets get tighter — especially when families are dealing with rising costs of non-negotiables including food, but aren’t seeing wage increases.
“We know from the recent report that we did in talking to consumers that it is a big stretch and that they try a lot of different strategies to keep up with that payment because having a car is so essential — so taking on other jobs, trying to cut other expenses, trying to negotiate with lenders,” Constantine said. “But really, consumers are trying to do everything they can to stay on top of that payment, because it’s key for their further economic stability.”
What to do at the dealership
Constantine offered a few tips for prospective car buyers:
- Try to get pre-approved for a loan with your credit union or bank before going to the dealership. That way, you have a little bit more leverage during the negotiation.
- Don’t be afraid to negotiate the terms of the transaction at the dealership, and be aware of add-ons that don’t necessarily improve the deal.
- Know the manufacturer’s suggested retail price, or MSRP, of the vehicle you want to purchase.
This story was originally published June 30, 2026 at 11:15 AM with the headline "Americans have $1.68 trillion in auto debt. How much do North Carolinians owe?."
