Many drivers are spending over 30% of their monthly income on auto loans, car insurance costs also rising

By Christopher Murray

Published February 28, 2024 2:19pm EST

Buying a vehicle is getting more expensive, with one in 10 drivers spending over 30% of their monthly pay on their auto loans, a MarketWatch study found.

The survey looked at 1,000 drivers and asked how their monthly car payments affected their finances and stress levels. About 40% of drivers can’t afford repairs and upgrades needed for their cars, the survey found.

Auto loans also prevent drivers from meeting other financial needs — 40% of drivers said they couldn’t afford basic essentials due to their high car expenses.

To make ends meet, drivers sacrificed spending in numerous other areas. About 25% stopped eating out as much while 13% of those surveyed stopped getting food delivery and directed that money towards car-related expenses.

High auto loans are contributing to more than just financial strain. Twenty-percent of drivers said they were "very" or "extremely" stressed due to overwhelming car costs, reported the MarketWatch study.

Auto loan delinquencies are on the rise

Auto loans have gotten high enough to the point where some drivers can no longer afford their monthly loan payment. Approximately 7.7% of auto loans became delinquent when annualized, according to the Federal Reserve Bank of New York.

"Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels," Wilbert van der Klaauw, Economic Research Advisor at the New York Fed said. "This signals increased financial stress, especially among younger and lower-income households."

Loan balances rose substantially in 2023, continuing the rising pattern drivers started seeing in 2020. In the last quarter of 2023, auto loan balances rose by $12 billion, making the total outstanding balance $1.61 trillion.

Auto insurance rates continue to go up

On top of high-cost loans, drivers are watching their auto insurance rates increase steadily as well.

The motor vehicle insurance index, tracked by the U.S. Bureau of Labor Statistics, increased by 1.5% in December 2023. The month before, it also rose by 1%. Over the entire course of 2023, the index rose by 20.3%.

Insurance costs are rising due to several factors — mainly inflation, supply chain issues and an increase in accidents.

COVID-19 has caused rising inflation over the last few years, causing the price of repairs to rise. Tack on supply chain issues due to labor shortages, and repair costs rise even higher.

When customers make claims and require these costly repairs, insurers pass on the cost in the form of higher monthly premiums, State Farm explains.

COVID also led to fewer drivers on the road, but now that more people have returned to work, accidents have increased. About 56% of drivers use video chat or record videos. This has led to an increase in accidents, which leads to an increase in claims.

Additionally, more than half of the respondents from another State Farm survey admitted to reading or sending texts while driving, also adding to the increase in accidents.

Many drivers are spending over 30% of their monthly income on auto loans, car insurance costs also rising

许多车主将月收入的30%以上用于汽车贷款，汽车保险费用也在上涨

Buying a vehicle is getting more expensive, with one in 10 drivers spending over 30% of their monthly pay on their auto loans, a MarketWatch study found.

来自MarketWatch的一项研究发现，买车越来越贵了，十分之一的车主将月工资30%以上用于汽车还贷。

The survey looked at 1,000 drivers and asked how their monthly car payments affected their finances and stress levels. About 40% of drivers can’t afford repairs and upgrades needed for their cars, the survey found.

这项调查调查了1000名车主，询问他们每月的汽车贷款对他们的财务和压力情况的影响。调查发现，大约40%的车主负担不起汽车维修和升级费用。

Auto loans also prevent drivers from meeting other financial needs — 40% of drivers said they couldn’t afford basic essentials due to their high car expenses.

汽车贷款也阻碍了车主其他经济需求——40%的司机表示，由于高昂的汽车费用，他们负担不起一些基本必需品。

To make ends meet, drivers sacrificed spending in numerous other areas. About 25% stopped eating out as much while 13% of those surveyed stopped getting food delivery and directed that money towards car-related expenses.

为了维持生计，车主们削减了许多其他方面的支出。约25%的人不在外出就餐，13%的受访者停止了送餐服务，这些钱都用于汽车相关费用。

High auto loans are contributing to more than just financial strain. Twenty-percent of drivers said they were "very" or "extremely" stressed due to overwhelming car costs, reported the MarketWatch study.

高额的汽车贷款造成的不仅仅是财务压力。据MarketWatch的研究报告，20%的车主表示，由于高昂的汽车费用，他们感到“非常”或“极度”有压力。

Auto loan delinquencies are on the rise

汽车贷款拖欠率呈上升趋势

Auto loans have gotten high enough to the point where some drivers can no longer afford their monthly loan payment. Approximately 7.7% of auto loans became delinquent when annualized, according to the Federal Reserve Bank of New York.

汽车贷款已经高得让一些车主无法负担每月的还贷。根据纽约联邦储备银行的数据，每年大约有7.7%的汽车贷款拖欠。

"Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels," Wilbert van der Klaauw, Economic Research Advisor at the New York Fed said. "This signals increased financial stress, especially among younger and lower-income households."

“信用卡和汽车贷款拖欠的概率仍在高于疫情前的水平”，纽约联储经济研究顾问Wilbert van der Klauw表示，“这表明财务压力增加，尤其是在年轻和低收入家庭中”。

Loan balances rose substantially in 2023, continuing the rising pattern drivers started seeing in 2020. In the last quarter of 2023, auto loan balances rose by $12 billion, making the total outstanding balance $1.61 trillion.

2023年，贷款余额大幅上升，延续了车主们在2020年开始看到的增长趋势。在2023年的最后一个季度，汽车贷款余额增加了120亿美元，使得总未偿余额达到了1.61万亿美元。

Auto insurance rates continue to go up

汽车保险费率继续上涨

On top of high-cost loans, drivers are watching their auto insurance rates increase steadily as well.

除了高成本的贷款，汽车保险费率稳步上升。

The motor vehicle insurance index, tracked by the U.S. Bureau of Labor Statistics, increased by 1.5% in December 2023. The month before, it also rose by 1%. Over the entire course of 2023, the index rose by 20.3%.

美国劳工统计局追踪的机动车保险指数在2023年12月增长了1.5%。这在前一个月，也上涨了1%。在2023年的整个过程中，该指数上涨了20.3%。

Insurance costs are rising due to several factors — mainly inflation, supply chain issues and an increase in accidents.

保险成本上升的原因有几个——主要是通货膨胀、供应链问题和事故的增加。

COVID-19 has caused rising inflation over the last few years, causing the price of repairs to rise. Tack on supply chain issues due to labor shortages, and repair costs rise even higher.

过去几年，新冠导致通货膨胀加剧，维修价格上涨。劳动力短缺导致的供应链问题，维修成本进一步上升。

When customers make claims and require these costly repairs, insurers pass on the cost in the form of higher monthly premiums, State Farm explains.

当客户提出索赔并要求进行这些昂贵的维修时，保险公司就会以更高的月保费的形式转嫁成本，State Farm解释道。

COVID also led to fewer drivers on the road, but now that more people have returned to work, accidents have increased. About 56% of drivers use video chat or record videos. This has led to an increase in accidents, which leads to an increase in claims.

新冠也是导致路上车减少原因，但现在更多的人重返工作岗位，事故也增加了。大约56%的司机使用视频聊天或录制视频。这导致了事故的增加，从而导致索赔的增加。

Additionally, more than half of the respondents from another State Farm survey admitted to reading or sending texts while driving, also adding to the increase in accidents.

此外，在另一项State Farm的调查中，超过一半的受访者承认在开车时阅读或发送信息，这也增加了事故的概率。