MIAMI—While auto loan delinquencies have been rising nationally among all U.S. consumers this past year, some cities have been bucking this trend, a new report from WalletHub reveals.
San Francisco is the city where auto loan delinquency is decreasing the most, as nearly 16.8% fewer loans were delinquent in Q2 2024 compared to Q1 2024, WalletHub said.
“In other words, a significant number of people have gotten back on track with their loan payments in the past quarter,” WalletHub said in its analysis. “San Francisco also has a relatively low auto loan delinquency rate in general, with fewer than 6.7% of loans delinquent as of Q2 2024.”
An Interesting Note
What’s interesting to note is that even though auto loan delinquency is noticeably decreasing in the City by the Bay, the city is among those where credit card delinquency is increasing the most, WalletHub noted. This indicates that people are prioritizing paying their auto loans above their credit cards, probably for fear of having vehicles repossessed, the analysis added.
Meanwhile, residents of Norfolk, Va. decreased their auto loan delinquency rate by nearly 12% between Q1 2024 and Q2 2024.
While this was a significant decrease, the city still has some progress to make, WalletHub said, noting that nearly 15.5% of all auto loans were still delinquent as of Q2 2024.
‘Not Surprising’
“It’s not all too surprising that Norfolk residents are decreasing their auto loan delinquency rate, as the city also had one of the lowest year-over-year increases in credit card delinquency during Q1 2024 and has relatively few residents in financial distress,” WalletHub said.
According to the analysis, Portland, Ore., had the third-largest decrease in auto loan delinquency, with nearly 11.9% fewer loans delinquent in Q2 2024 compared to Q1 2024. In general, though, Portland still has a relatively high delinquency rate, with around 12.4% of loans delinquent as of Q2 2024, the analysis found.
Priority in Portland
“Portland residents do seem to prioritize paying off auto loan debt over credit card debt, as Portland ranks in the top 10 cities where credit card delinquency is increasing the most,” WalleltHub said. “This makes sense because auto loans are secured debt while credit cards are unsecured debt. Failing to pay your auto loans can lead to you losing your car.”