September 2024
Caution on the road ahead
Some U.S. households have seen increasingly large auto loan repayments – is it enough to let off the gas?
Key takeaways
- Higher car prices and financing rates mean auto loan repayments have risen significantly since the pandemic. In Bank of America internal data the median auto loan repayment is up 30% compared to 2019 levels.
- Lower-income households have seen a particularly large increase in their monthly auto payments and the majority of these households now make regular auto payments above $500 a month. That said, strong wage and salary growth for lower-income households has kept pace with higher auto payments.
- However there are risks. As a share of their median deposits, auto payments have risen significantly and households with the largest rises might need to pare back their other spending significantly in adverse economic scenarios.
Read our full analysis for a more in-depth look at these trends.
