Auto loan delinquency rising in Washington. What to do when you’re behind on car payments

Karlee Van De Venter
Tony Overman/toverman@theolympian.com

When people discuss rising costs, they’re often referring to goods like groceries, gas and other essential items. But while these prices rise, other expenses increase too.

Many have had the cost of their recurring expenses go up recently, from insurance to rent to loan payments. Altogether, some are experiencing a significant increase in monthly costs.

This can lead to difficult decisions, such as choosing one bill to pay over another.

That’s just one possible reason so many people are behind on their car payments, according to the latest quarterly report from the Center for Microeconomic Data. Auto loan delinquency has been rising across the country, with significant increases in the last half of 2023.

A recent study out of personal finance site WalletHub looked at proprietary user data on consumer delinquency rates to rank which states had the largest increase in auto loan delinquency in that time. Turns out, Washington fell off the most.

Auto loan delinquency increases by state

Washington state had the largest increase in auto loan delinquency during Q3 and Q4 2023. In Q4, over 10% of auto loans were not paid on time, a 12.89% increase from the quarter prior.

While Washington had the largest increase, it still has a relatively small percentage of borrowers with loans in delinquent states. In fact, it’s among the five states with the smallest total percentage of delinquency.

But in quarter-to-quarter increases, Washington reigned supreme, followed by:

  • Alaska

  • Oregon

  • Georgia

  • Rhode Island

The states will the lowest increases were:

  • Iowa

  • Montana

  • Minnesota

  • Maine

  • Wyoming

Behind on auto loan payments

What happens when your auto loan is in a delinquent state?

A “delinquent” loan simply refers to loans whose last payment was not received by the specified due date. If you’re even one day off, the loan will be considered delinquent for that month. The longer the delinquency, the worse the consequences get.

First, you’ll likely owe a late fee. Depending on your loan, this will increase in certain increments.

If you’re 30 days late on your payment, your delinquency will be reported to credit bureaus. At this point, you should communicate with your lender to prevent repossession of your car.

“Ask if your lender has a hardship plan, or try strategies like cutting other expenses or consolidating debt,” WalletHub editor John Kiernan stated in the press release.

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