2017’s cities that overspend on cars

February 15, 2017 6:26am
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•  Auto loan debt rising

•  Debt-to-income as high as 187 percent

U.S. auto sales hit a new record in 2016 for the seventh consecutive year. While car dealers are rejoicing, many drivers are on the road to financial ruin, contends the personal-finance website WalletHub, a unit of Evolution Finance Inc., of Washington, D.C.

According to the Federal Reserve Bank of New York’s latest report on household indebtedness, auto-loan balances have grown steadily, increasing by another $32 billion in Q3 2016 to $1.135 trillion in total.

The combination of rising auto sales and low interest rates has encouraged more lending to subprime borrowers, or those with credit scores below 620, giving reason to pause for concern, says WalletHub.

But it’s a different story in every city. In order to determine where Americans overspend on their set of wheels, WalletHub's analysts compared the average auto-loan balance in each of 2,539 U.S. cities.

Residents of these Central Valley cities are taking on auto loans with debt-to-income ratios exceeding 100 percent:

99th percentile: Delano, $22,041 $15,554 142%

98th percentile: Dinuba, $21,341 $17,603 121%

96th percentile: Madera, $21,174 $19,885 106%

96th percentile: Reedley, $18,511 $17,726 104%

96th percentile: Porterville, $21,310 $20,821 102%

95th percentile: Selma, $21,241 $21,033 101%

Other Central Valley cities:

95th percentile: Los Banos, $21,422 $21,550 99%

90th percentile: Sanger $19,710 $21,854 90%

87th percentile: Merced, $19,633 $22,757 86%

85th percentile: Atwater, $21,293 $25,283 84%

85th percentile: Lemoore, $23,979 $28,442 84%

84th percentile: Oroville, $18,053 $21,668 83%

83rd percentile: Tehachapi, $20,397 $25,017 82%

82nd percentile: Chico, $17,123 $21,142 81%

82nd percentile: Ceres, $19,061 $23,428 81%

82nd percentile: Fresno, $19,070 $23,513 81%

82nd percentile: Red Bluff, $19,036 $23,539 81%

82nd percentile: Yuba City, $20,492 $25,405 81%

79th percentile: Tulare $21,045 $27,129 78%

74th percentile: Stockton, $18,793 $25,277 74%

74th percentile: Hanford, $23,095 $31,409 74%

72nd percentile: Visalia, $21,555 $29,378 73%

71st percentile: Lodi, $19,320 $26,673 72%

70th percentile: Bakersfield,$20,945 $29,356 71%

69th percentile: Oakdale, $21,455 $30,492 70%

67th percentile: Davis, $15,449 $22,340 69%

67th percentile: Riverbank, $19,561 $28,165 69%

65th percentile: Modesto, $18,668 $27,292 68%

62nd percentile: Turlock, $19,109 $29,023 66%

60th percentile: Manteca, $20,359 $31,084 65%

56th percentile: Galt, $19,321 $30,742 63%

56th percentile: Patterson, $20,294 $32,166 63%

54th percentile: Rancho Cordova, $18,915 $30,516 62%

54th percentile: West Sacramento, $19,157 $30,671 62%

54th percentile: Clovis, $20,895 $33,930 62%

47th percentile: Tracy, $20,959 $36,127 58%

42nd percentile: Sacramento, $17,230 $30,732 56%

36th percentile: Carmichael,$17,256 $32,785 53%

30th percentile: Elk Grove, $20,251 $41,613 49%

28th percentile: Rocklin, $20,060 $41,670 48%

26th percentile: Roseville, $19,722 $41,902 47%

23rd percentile: Fair Oaks, $17,982 $39,599 45%

5th percentile: Folsom, $18,513 $59,018 31%

The lowest car loan debt to income ratio is found in Scarsdale, New York, the cream of the 1st percentile, with just 16 percent of the median annual income of $104,234 going to pay off the Rolls Royce. That’s perhaps just for the car’s sound system since the average loan is $16,769.

At the other end of the scale, residents of Ruston, Louisiana are at the bottom of the 99th percentile with a debt-to-income ratio of 187 percent. The average car loan there is $24,139 while the median annual income is $12,893.


» For more information including methodology:  https://wallethub.com/car-payment-calculator/

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