Turns out the adage "everything is bigger in Texas” also includes auto loan debt.
According to a recent study by LendingTree
, residents of the Lone Star State have 44% more auto loan debt than Americans as a whole. Although data varies from city to city, Texans' average balance per loan is $19,183, while the average auto loan origination amount is $26,702.
In the most extreme case, residents in the city of Andrews in West Texas take out the biggest auto loans, with a citywide average of $33,634. They also have the highest monthly payments at $614 per loan.
For many Texans, that's no small amount of money. According to the Department of Numbers
, the average household income is $59,206. This means residents have to spend years shelling out cash to meet minimum payments, which often carry high interest rates.
So, why do Texans carry so much more auto loan debt than the rest of the country?
David A. MacPherson, a Trinity University economics professor, suggests there may be a pattern between location and loan amount.
“Residents living in small towns and more rural areas tend to be lower-income,” Macpherson said. “They also often drive heavy duty vehicles like pick-up trucks, and these can be much more expensive. Compare this to a higher-income resident living in a larger city, where more affordable vehicles like sedans are common.”
It’s true that pickup trucks are popular in Texas. So popular, in fact, that big automakers actually make special models to market to its residents. Many even consider pickups to be luxury vehicles, which may contribute to how much they're willing to spend.
“It’s important to think about the bigger picture when looking at these numbers,” Macpherson. “Then we can understand where the extremes come from.”
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