New data shows Texas leads the U.S. in $1,000+ car payments, with Gen X and high-credit borrowers driving the trend.
HOUSTON — If your monthly car payment feels sky-high, you’re not alone — especially in Texas. A new analysis from LendingTree reveals that nearly 1 in 8 Texas auto loan holders are paying $1,000 or more each month for their vehicle, the highest rate in the nation.
Nationwide, 8.6% of Americans with auto loans had at least one monthly payment of $1,000 or more during the first quarter of 2025. But the Lone Star State outpaces every other state, with 12.8% of borrowers facing these four-figure monthly payments.
“It’s a tough time to be in the market for a car,” the LendingTree study notes, pointing to an average new vehicle price nearing $50,000, along with persistently high interest rates.
Texas tops the list
According to the report, LendingTree reviewed 180,000 anonymized credit reports from Americans with active vehicle loans or leases. Texas led all states in the percentage of borrowers with $1,000+ payments, followed by Nevada (11.9%), Georgia and Wyoming (11.6% each), and California and Florida (11.3%).
These states, many with sprawling suburbs and long commutes, are more reliant on cars and trucks, often requiring more expensive vehicles to meet lifestyle or job demands.
Gen X drivers face the biggest payments
Generation X leads in high car payments, with 10.8% of auto loan holders ages 45-60 making payments of $1,000 or more monthly. Baby boomers follow at 8.6%, millennials at 8.0%, and Gen Z at just 3.2%.
The study attributes this to Gen Xers being “in their prime earning years” with higher incomes and better credit scores than younger generations.
Credit scores drive payment ability
Higher credit scores correlate directly with larger monthly payments. Those with super-prime credit scores of 720 or higher are most likely to have $1,000+ payments at 10.4%, while those with deep subprime scores below 580 are least likely at 5.2%.
However, the reasons differ: high-credit borrowers typically take larger loan amounts, while poor-credit borrowers face higher interest rates that can be “three or more times higher.”
Four-digit payments are becoming more common
What’s especially alarming is how recent many of these high-payment loans are. LendingTree reports that a staggering 40.3% of $1,000+ car loans were originated just last year, in 2024.
With typical loan terms ranging from five to six years, that means millions of Americans — including many Texans — may be locked into steep car payments for years to come.
A heavy burden on household budgets
According to LendingTree, a $1,000 monthly car payment represents 10.9% of the average U.S. household’s monthly income. That’s a significant financial burden, particularly for families already feeling the squeeze from rising costs across the board.
The report encourages potential car buyers to improve credit scores, comparison shop for lenders, and avoid borrowing more than they truly need.
“Just because a bank will loan you the money for a $50,000 car doesn’t mean you need to take it.”
Methodology
LendingTree analyzed about 180,000 anonymized credit reports from users with active auto loan accounts between January 1 and March 31, 2025. The data was broken down by state, generation, and credit score range.