It appears that the southern region of the country has been leading the nation when it comes to owing money on their cars and trucks. Eight out of the top ten metropolitan areas with the most auto loan debt per household are in the southern portion of the United States. According to a recent study conducted by Manilla.com, Shreveport Louisiana was found to have, on average, $18,603 in auto debt per household. Shreveport is in good company: New Orleans (LA), Houston (TX), Little Rock-Pinebuff (AR), San Antonio (TX), Lafayette (LA), New York (NY), Miami-Ft. Lauderdale (FL), Las Vegas (NV), and Wilkes Barre-Scranton (PA) have rounded out the top ten cities. With such a large number of cities in the Heart of Dixie accumulating auto debt, the south has taken the reins in leading the country through the economic recovery of the auto industry.
Why has the southern US been accumulating more debt on their autos compared to the rest of the country? The reason, to a great degree, is due to simple economics. According to government figures obtained by Manilla.com, the southern half of the United States has weathered the economic crisis better than the rest of the country. The south has had the advantage of a relatively steady employment rate throughout the national recession. These employment rates have continued to increase throughout the recent summer months. Louisiana in particular has added jobs at a higher rate compared to the rest of the nation. Steady employment and relatively stable household income means that the South now has a little extra spending money.
In addition to increased volume in auto loans, delinquencies on existing loans have been decreasing over the past few months. Lower default rates and increased auto loan balances is considered welcome news for the auto industry. The US auto industry took a hard hit during the recent financial recession. Banks were unwilling or unable to loan out large amounts of money to the public for the financing of auto purchases. Auto companies in turn were unable to sell their vehicles which led to a backlog of auto inventory. With banks now loosening credit restrictions and lending money more often, people have started to take advantage of the current low interest rates and started purchasing new vehicles. The Heart of Dixie has become a shining example of how the American spirit will always prevail in challenging times.
Of course, if you live in the #2 city of Houston and need to finance a car, be sure to check out our Houston page for more information.
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