Riding the Wave of Auto Loan Growth: State-Specific Opportunities in Florida and Georgia

The automotive finance sector is undergoing a seismic shift, driven by surging auto loan balances and evolving delinquency trends. While national headlines warn of a looming crisis, a closer look at state-level data reveals pockets of opportunity—particularly in Florida and Georgia. These two states boast high average auto loan balances but exhibit delinquency rates that remain manageable, positioning them as prime markets for investors seeking exposure to the sector.

The National Auto Loan Landscape: Growth Amid Risks

Total U.S. auto loan debt hit $1.64 trillion in early 2025, fueled by rising vehicle prices, extended loan terms (now averaging 68 months for new cars), and elevated interest rates. While new car loans carry an average APR of 6.73%, used car loans—often tied to subprime borrowers—soar to 11.87%. This creates a precarious balance: borrowers in high-cost states face heavier debt loads, yet not all regions are equally vulnerable.

Why Florida and Georgia Stand Out

Florida and Georgia rank among the top 10 states for average auto loan balances ($6,560 and $6,530, respectively), yet their delinquency rates remain relatively low compared to states like Texas (7.92%) and Louisiana (25.17%). This divergence points to underlying economic resilience:

1. Florida's Advantage:
2. Tourism-driven economic stability supports household income.
3. A younger population (attracted by warm weather and job opportunities) correlates with higher credit scores.

5. Georgia's Strengths:

6. A booming job market, anchored by Atlanta's tech and logistics hubs.
7. Strategic location as a transportation and distribution center, attracting businesses and workers.

Navigating the Risks

While these states offer compelling opportunities, investors must acknowledge risks:
- Interest Rate Sensitivity: Rising rates could strain borrowers with variable-rate loans.
- Used Car Price Volatility: Georgia's used car prices ($36,016) remain elevated, potentially stretching affordability.
- Regional Economic Shocks: Overreliance on tourism (Florida) or tech (Georgia) could amplify risks during downturns.

Investment Strategies for State-Specific Gains

1. Regional Lenders:
2. Target banks with strong footholds in Florida and Georgia, such as SunTrust Bank (now part of Truist Financial, TFC) or Bank of America (BAC), which dominate local lending.

4. Automotive Retailers:

5. Invest in dealerships or used-car platforms (e.g., Carvana (CVNA)) in high-demand states. Florida's $6.5 billion automotive sales market offers fertile ground.

7. Debt-Backed Securities:

8. Consider collateralized loan obligations (CLOs) backed by auto loans in low-default states. Florida and Georgia's manageable delinquency rates make their portfolios safer bets.

Conclusion: A Calculated Bet on Growth

Florida and Georgia represent a rare blend of high auto loan balances and disciplined repayment behavior—a sweet spot for investors. While national trends warn of overleveraged borrowers, these states' economic fundamentals and borrower profiles suggest they can weather rising rates and inflation.

For now, the playbook is clear: allocate to regional lenders, capitalize on retail demand, and avoid states with delinquency rates above 8%. The automotive finance sector may be turbulent, but its regional winners are already in plain sight.

This analysis underscores that not all auto loan markets are created equal. Florida and Georgia's data-driven advantages position them as pillars of stability in an otherwise volatile sector.