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As Trump Drives Up Gas Prices and Trashes Economy, US Auto Debt Hits Record High
"Reckless actions on the economy and the expensive fallout from the war in Iran has made it harder for working families to purchase a car and has left millions more feeling major pocket pain at the pump," one researcher said.
May 06, 2026
As Americans on Wednesday continued to face the economic fallout of President Donald Trump's war on Iran, a gallon of gasoline cost $4.536, the average transaction price for a new vehicle was $49,275, and a pair of progressive groups published a report detailing "how surging auto loan debt is hurting households."
"The costs of purchasing and financing a car have been going up for years," noted Protect Borrowers senior fellow Tara Mikkilineni, who co-authored the report, "When The Wheels Come Off," with other experts from her organization and The Century Foundation.
"Unfortunately, the Trump administration's reckless actions on the economy and the expensive fallout from the war in Iran has made it harder for working families to purchase a car and has left millions more feeling major pocket pain at the pump," Mikkilineni said. "For millions of working families, a car is not a luxury, it is an essential economic lifeline. Working families deserve relief and they deserve to have a government that is watching out for them, not allowing lenders and auto dealers to rake in record profits at their expense."
Mikkilineni's team found that "in recent years, aggregate total auto debt has reached $1.68 trillion, a 37% jump since early 2018, and now comprises the largest volume of outstanding loan debt ever recorded. At the end of 2025, nearly 86 million Americans—roughly 28% of consumers—have outstanding auto loan or lease debt. Residents in states where driving is most necessary, such as Texas, Alaska, Louisiana, and Florida, are struggling with the highest levels of auto debt."
"Borrowers carrying auto loans see significantly higher and faster credit card balance growth—regardless of income level—suggesting that auto debt cascades into broader financial pressure," according to the report. Specifically, "between early 2018 and late 2025, credit card balances for middle-income borrowers with auto debt surged by 31%, while those without auto loans saw a notably lower growth of 17%. Borrowers with extended-length auto loans are carrying monthly balances on their credit cards that are 190% of (that is, nearly twice) their monthly income."
"At the end of 2025, the average origination balance for an auto loan reached $33,519, an amount $10,000 higher than the average in 2018, due to massive increases in the price of even the most basic cars and a shortage of 'affordable' car models," the publication explains. "Borrowers are also facing higher interest rates. Today, the average annual percentage rate (APR) for auto loans is nearly 10%, up from 7.5% in 2018."
Financially vulnerable borrowers are being hit particularly hard by current conditions. The researchers found that for those with the most limited access to credit, "the average APR is up to 18.7%, which means a six-year loan on a $30,000 car will cost $20,000 in interest alone. Furthermore, Black, Hispanic, and American Indian and Alaska Native borrowers face higher interest rates than their white and Asian counterparts."
NEW from @cnbc.com: Auto debt is crushing families. Our new report with @borrowerjustice.bsky.social shows that 86 million Americans owe a staggering $1.68 trillion in auto loan debt, with auto debt now reaching the highest level ever recorded. www.cnbc.com/2026/05/06/c...
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— The Century Foundation (@tcfdotorg.bsky.social) May 6, 2026 at 10:24 AM
Affordable vehicles are also harder to find these days. Sean Tucker, a managing editor at Kelley Blue Book, told CNBC that "in 2017, [automakers] built 36 models priced at $25,000 or under... Today? Four."
Tucker said that a "record" share of new cars—over 43%—are now bought by households with incomes of at least $150,000. According to him, "Automakers are serving that market."
Angela Hanks, another report co-author and chief of policy programs at The Century Foundation, stressed that "for the overwhelming majority of working families, a car is a necessity—yet purchasing a car has become a financial trap, eating up more of people's paychecks than ever before."
With so many US communities lacking quality public transit, some US families in need of a vehicle turn to loans with longer terms. The report points out that "for these borrowers, even after taking on these riskier products with additional lifetime costs, auto loan payments are still nearly 20% of their monthly income, meaning nearly $1 out of every $5 they earn will go toward car payments over the seven years of their loan."
Hanks highlighted that "while families drown" from costly, extended-term loans, "the Trump administration is refunding big businesses for the tariffs that consumers paid, with interest."
The Trump administration last month launched a portal designed to facilitate refunds for around $166 billion in tariffs that the US Supreme Court struck down as unconstitutional, but only businesses that directly paid the import taxes are eligible, even though companies largely passed on the cost hikes to consumers.
Meanwhile, the president responded to the high court's decision by imposing temporary import taxes, and his administration is pursuing "plan B," holding hearings required to impose tariffs under Section 301 of the Trade Act of 1974, a different legal authority than the one Trump used last year.
The new report concludes by calling on US policymakers to act: "Amidst the growing affordability crisis, Americans deserve urgent action to bring down costs and rein in profiteering from the dealers and lenders who have been allowed to get away with nickel-and-diming working families for far too long."
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Trump Economic Adviser Boasts That US Consumers Are 'Spending More on Gasoline' and 'Everything Else'
"Is this supposed to be a brag?" said Democratic US Rep. Mark Pocan.
May 06, 2026
National Economic Council Director Kevin Hassett on Wednesday tried to put a rosy spin on President Donald Trump's economy by highlighting the large credit card bills being racked up by US consumers.
During an interview on Fox Business, Hassett cited credit card spending as a purported sign of strength in the economy as a whole.
"I had the head of one of the Big Five banks in my office yesterday, going through credit card data," he said. "Credit card spending is through the roof! They're spending more on gasoline, but they're spending more on everything else too."
Hassett on American consumers: "Credit card spending is through the roof. They're spending more on gasoline, but they're spending more on everything else too." pic.twitter.com/zayCSaxhwr
— Aaron Rupar (@atrupar) May 6, 2026
The price of oil has been surging since Trump launched an illegal war with Iran in late February, and on Wednesday the average price for a gallon of gasoline in the US topped $4.50, a high not seen since 2022 in the wake of Russia's invasion of Ukraine.
As the Iran crisis persists, economists project that the price of energy will be reflected in increases in other consumer goods, most notably food.
Given this, many critics were astonished that Hassett decided to brag about consumer credit card spending as a way to reassure Americans concerned about the economy.
"Working-class Americans are maxing out their credit cards to pay for groceries and gas," wrote House Minority Leader Hakeem Jeffries (D-NY). "The Trump Cartel thinks this is something to celebrate. Shameful."
Hassett's claims about credit card spending also earned a swift rebuke from Warren Gunnels, staff director for Sen. Bernie Sanders (I-Vt.).
"Americans are putting more stuff on credit cards because they don’t have enough money to pay for the skyrocketing cost of virtually everything," Gunnels wrote. "Trump promised to put a 10% cap on credit card interest rates. Instead, the average credit card interest rate today is 22%. Obscene."
Fred Wellman, a Democratic candidate for the US House of Representatives in Missouri, could not hide his disgust at Hassett's performance.
"He’s smiling," Wellman observed. "He's celebrating that we are all maxing out our credit cards because they have torched the economy. He’s not smiling for working people. He’s happy for the corporations and billionaires. It's good for them. We can all die poor. This is why I'm running for Congress."
Rep. Mark Pocan (D-Wis.) expressed bewilderment at Hassett's argument.
"Is this supposed to be a brag?" Pocan asked.
Jon Favreau, former speechwriter for President Barack Obama and current co-host of Pod Save America, found Hassett's messaging so tone-deaf that "we must consider the possibility that Kevin Hassett is secretly working for the Democrats."
The Democratic House Majority Political Action Committee had a response similar to Favreau's, recommending that the GOP make Hassett "the spokesperson for the entire Republican Party."
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Platner, El-Sayed Embrace Warning That They Are 'Direct Threat to the US-Israel Relationship'
"I’m Abdul El-Sayed and I endorse this message," said the US Senate candidate in Michigan.
May 06, 2026
Two Democratic US Senate candidates in closely watched primary races found themselves in rare agreement with a powerful pro-Israel lobby group on Tuesday evening after it warned the two progressives posed "a direct threat to the US-Israel relationship."
"I’m Abdul El-Sayed and I endorse this message," said the physician and public health advocate running in a three-way race in Michigan, where he recently emphasized at a rally that the American Israel Public Affairs Committee (AIPAC)—the group that issued the warning to voters—has endangered Jewish Americans by promoting the idea that criticizing the Israeli government is antisemitic.
In Maine, combat veteran and oyster farmer Graham Platner, the presumed winner of the June 9 primary following Gov. Janet Mills' decision to suspend her campaign, said he was also "proud to appear" in AIPAC's fundraising email, "and many AIPAC fundraising emails to come."
In its email to supporters, AIPAC said El-Sayed and Platner are the chosen candidates of a "coordinated, well-funded effort to punish anyone who stands with Israel"—one that's being "driven by the far-left fringe of American politics."
The group added that the movement is being "pushed" by Sen. Bernie Sanders (I-Vt.)—one of the nation's most prominent Jewish political leaders and consistently ranked as the most popular member of the US Senate—and "amplified by voices like Hasan Piker," a Twitch streamer and commentator who has campaigned with El-Sayed.
Piker's involvement in El-Sayed's campaign sparked a weekslong controversy, with the other two Michigan Democrats in the race, AIPAC-backed Rep. Haley Stevens and state Sen. Mallory McMorrow, accusing El-Sayed of associating with someone who's promoted antisemitism and comparing Piker to white nationalist influencer Nick Fuentes. Both El-Sayed and Piker have condemned antisemitism, expressed vehement support for Palestinian rights, and denounced Israel's US-backed attacks on the occupied Palestinian territories.
In its email, AIPAC doubled down on its claims that El-Sayed and Platner are part of an extremist movement that occupies the fringes of American public life, warning that they've embraced "extreme rhetoric, pushed false accusations of genocide, and openly support cutting off aid" to Israel.
But numerous polls in recent months have suggested that Israel's actions since it began attacking Gaza in October 2023 with US military funding—killing more than 72,000 Palestinians, creating the largest child amputee population in the world, and imposing an intentional starvation policy—have resulted in plummeting approval ratings for the country and its right-wing government, without any help from Sanders, Platner, El-Sayed, or Piker.
Months into Israel's war on Gaza, cracks in Israel's popularity among US voters were already beginning to show. In May 2024, a poll by Data for Progress found that 56% of Democratic voters believed Israel was committing genocide in Gaza, and 54% said they supported suspending all US arms sales to Israel until it stopped blocking humanitarian aid.
Public disapproval has only grown more pronounced since then. A Gallup poll showed in February that for the first time, a larger share of Americans sympathized with the Palestinians than with Israel in the Middle East conflict. In March, a survey by Hart Research Associates and Public Opinion Strategies found that just 32% of US voters viewed Israel positively, down from 47% in 2023.
Just before the US helped broker a ceasefire between Israel and Hamas last October—a deal Israel has repeatedly violated, killing hundreds of Palestinians since it was reached—a Washington Post poll found that 61% of Jewish Americans believed Israel had committed war crimes in Gaza and 40% said Israel was guilty of genocide.
At a rally held by Platner and Sanders in September, the political newcomer garnered loud applause when he called for an end to US funding for the Israeli military.
On Tuesday, despite the mounting evidence to the contrary, AIPAC replied to El-Sayed's "endorsement" of its attack by insisting that many voters want to vote for a candidate "who backs a partnership that delivers for Michigan—more jobs, a stronger auto industry, thriving agriculture, and better healthcare."
The Medicare for All advocate retorted that he plans to be "a senator who keeps Michigan tax dollars in Michigan to fund schools, healthcare, and roads... in Michigan."
Recent polls have shown a close race in the state. The most recent survey by the Glengariff Group found Stevens ahead of El-Sayed by just two points, with McMorrow behind six points. A poll by Emerson College, also taken in mid-April, found El-Sayed and McMorrow tied with 24% of the vote, despite the attacks on El-Sayed over his campaigning with Piker.
The Michigan primary is scheduled for August 4.
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