Study ranks North Carolina among worst states for car payment affordability

RALEIGH, NC (WWAY) — North Carolina ranks among the states where drivers spend the largest share of their income on car payments, according to a new analysis from ConsumerAffairs.

The report ranked North Carolina fifth in the nation for having the most “car-poor” drivers, a term used to describe motorists whose vehicle payments consume a significant portion of their income. The analysis examined auto loan refinancing data, including monthly payments, annual percentage rates, loan terms and reported incomes.

According to the report, North Carolina drivers seeking to refinance their auto loans reported a median monthly car payment of $630 and a median annual income of $48,000. Those payments account for about 15.75% of monthly income, placing the state among the highest in the country for payment burden. The study also found a median auto loan interest rate of 15.12% and a median loan term of 75 months, both among the nation’s highest.

ConsumerAffairs noted that while North Carolina’s median monthly payment is slightly below the national median, lower reported incomes mean many drivers devote a larger share of their earnings to vehicle loans.

The report also found that North Carolina drivers in the refinancing market had the highest average credit scores among the 10 highest-ranked states, which researchers said could improve borrowers’ chances of qualifying for lower interest rates through refinancing.

Nationally, ConsumerAffairs found the median monthly car payment among drivers looking to refinance was $640. The report comes as auto loan debt continues to grow across the United States and vehicle affordability remains a challenge for many households.