Millions of Americans rely on car loans to finance their cars, contributing to the total debt of nearly $1.7 trillion in car loans. a
At the end of 2024, the average household earned nearly $13,800 in car loan debt. However, the pace of car loan debt reductions varies across the country. However, Florida’s trends show that borrowers are paying off their debts more quickly than in other states.
Personal Finance website Wallethub analyzed data on the average car loan consumer and monthly payments.
In Florida, Wallethub looked at three reasons why the state’s overall automobile debt is declining.
The first was people trying to get out of debt. The second was that residents were shrinking due to the effects of rising car prices, and the third was that they realized that the loan burden was unsustainable.
Tips for repaying your car loan debt
Accelerate payments: Consider making additional payments to your car loan if possible. Paying the minimum monthly amount will cut your principal faster and ultimately save you money with interest and shorten your overall repayment period. Make sure your lender won’t be penalized for paying off your loan early.
Refinance for better terms: Explore the possibility of refinancing your car loan and see if you qualify for lower interest rates or more favorable terms. Refinancing could potentially reduce monthly payments and allow you to pay off your loan more quickly. If you have good or good credit, you can also consider moving your debt to a Balance Transfer Credit Card with Promotion 0% APR.
Set up automatic payments. Setting up automatic payments is a good practice for any loan as it prevents you from being late as long as you have enough funds in your bank account. Some auto lenders may even give you a discount when setting up Autopay.
Be careful about your budget. Taking the time to create a monthly budget and stick to it will help you organize your finances and spend as much money as possible on paying off your loan. Try to cut out as many unnecessary expenses as possible until you don’t have debt.
Increase your income. If you spend extra time, get part-time side jobs, or increase your income, you have more money to pay off your car loan.
