Millions of Americans depend on auto loans to finance their vehicles, contributing to a total auto loan debt of nearly $1.7 trillion. A
At the end of 2024, the average household carried nearly $13,800 in auto loan debt, just a few hundred dollars shy of the all-time high. However, the pace of auto loan debt reduction varies across the country. However, the trend in Florida shows borrowers are paying down debt more quickly than in other states.
Personal Finance website WalletHub analyzed data on the average auto loan consumers had and their monthly payments.
In Florida, WalletHub looked at three reasons why the state’s overall auto debt was falling.
The first was those looking to get out of debt. The second was that residents were scaling back due to the impact of rising car prices, and the third was that they realized that their loan burdens were unsustainable.
Tips for Paying off Auto Loan Debt
Accelerate your payments: Consider making extra payments on your auto loan whenever possible. Paying more than the minimum amount each month reduces the principal faster, ultimately saving you money on interest and shortening the overall repayment period. Just make sure the lender won’t penalize you for paying off the loan early.
Refinance for better terms: Explore the possibility of refinancing your auto loan to see if you qualify for a lower interest rate or more favorable terms. Refinancing can potentially reduce your monthly payments or enable you to pay off the loan more quickly. If you have good or excellent credit, you could also consider moving your debt to a balance transfer credit card with a promotional 0% APR.
Set up automatic payments. Setting up automatic payments is good practice for any loan, as it prevents you from being late as long as you have sufficient funds in your bank account. Some auto lenders may even give you a discount when setting up autopay.
Budget carefully. Taking the time to create a monthly budget and stick to it will help you organize your finances and put as much money as possible toward paying off your loan. Try to cut out as much unnecessary spending as you can until you’re free of debt.
Increase your income. You’ll have more money to put toward paying off your auto loan if you work extra hours, get a part-time side job, or otherwise boost your income.
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