Driven into Debt: How Car Loans Are Squeezing Young Bostonians

When 26-year-old Ben Tran starts his day behind the wheel in Quincy, his car isn't just a way to get around—it's his livelihood. A Vietnamese immigrant and full-time Uber driver, Tran spends more than ten hours a day on the road, but nearly a third of his earnings go straight toward his car loan and insurance. “I can't stop driving,” he said. “If I don't work, I can't make the payments.”

He's not alone. Third-year Northeastern student Terri Roberts carries a $17,000 auto loan and says the monthly payment “hangs over me every month.” For many young workers and immigrants in Greater Boston, cars have become both a necessity and a financial trap—a tool for survival that ties them deeper into debt.

For many young people in Boston, the choice isn't about wanting a car, but about surviving in a city where public transit doesn't reach far enough. For Tran, Roberts, and others like them, cars are no longer symbols of freedom but of obligation and debt. As used car prices surged during and after the pandemic, interest rates climbed, and loan terms stretched to six or seven years, the cost of staying mobile has become unsustainable. Those hit hardest are young workers, recent graduates, and immigrants—people with limited savings and thin credit histories.

Even for those with steadier finances, like 21-year-old Northeastern student Thea Keene of Roxbury, mobility still comes at a price. She pays $500 a month for her new car and says that “owning a car gives me freedom, but it's also expensive.” And Chen Wang, a 22-year-old recent graduate from Berklee College of Music, relies on a used Nissan he purchased earlier this year for his commute from his home in Malden. The car cuts his travel time to just 17 minutes, and he often practices on campus late into the night—long after the Orange and Green Lines shut down. But the cost of staying mobile adds up quickly. His insurance alone is $270 a month, up from $240 when he first bought the car. “It's more expensive for young people who aren't married and don't have a job,” he said.

Wang moved to Malden because of Boston's rising rents — he now pays $850 a month for an apartment with four roommates, plus $50 for parking. “It's hard to find an apartment under $1,500 in downtown Boston,” he said. Gas is the only part that feels manageable: he spends just about $30 a month, enough for two weeks of city driving. Together, their stories reflect a larger pattern of financial pressure facing Boston's younger generations, who are struggling to stay mobile in one of the country's most car-dependent regions.

Eric Bourassa, Transportation Director at the Metropolitan Area Planning Council, said this dependency is largely structural. “Many people now live farther from central Boston for better housing prices or job access,” he explained. “They end up needing cars even when they'd rather not.” The struggle to stay mobile in Greater Boston has become more than a transportation issue—it's a reflection of widening financial inequality and the limits of urban policy to keep pace with the cost of living.

Visualizing the Car Loan Debt Crisis in Massachusetts and Beyond

Nationally, auto loan delinquencies began rising sharply in 2022, following years of pandemic forgiveness and stimulus payments. As car prices and interest rates climbed, more borrowers fell behind on payments. The trend was especially strong among younger consumers and those holding subprime loans — high-interest loans given to borrowers with lower credit scores or limited credit history. In 2024, delinquency rates reached their highest levels since before the 2008 financial crisis, reflecting growing financial pressure on vulnerable borrowers.

"Some customers bought cars at peak pandemic prices, and now that prices have dropped, it's easy to end up with negative equity," said Victor Wang, a marketing manager at Boston Auto in Quincy. "Many face income pressure, so repayment difficulties have become more frequent."

Kristin Shell, interim co-CEO of Working Credit, a national nonprofit that helps people build credit, points to a deeper problem: misinformation. "There's so much inaccurate information swirling around social media and TikTok about how to build credit," she said. "Young adults and immigrants often think they need a car loan to build credit, but you don't have to go into debt to have a good score."

Shell said many young borrowers could build strong credit in six to twelve months using secured credit cards or small credit-builder loans—without taking on car debt. "A small secured credit card can get you above a 700 credit score within a year," she explained, "but instead, we see people jumping into $25,000 car loans with 18% interest rates because they don't know there are better options."

Communities of color in every major Massachusetts county show significantly higher auto-loan delinquency rates than white borrowers, a reflection of widening financial vulnerability among lower-income and immigrant households. In Suffolk County (Boston) and Middlesex County (Cambridge/Somerville), communities of color are more than twice as likely to fall behind on their auto payments compared with white borrowers. Even in relatively affluent areas like Norfolk County(Quincy/Brookline), the delinquency rate for communities of color remains nearly three times higher. This suggests that structural inequalities — credit history gaps, income instability, and higher borrowing costs — continue to shape who bears the heaviest debt burden. Bourassa noted that lower-income and immigrant communities face added financial barriers: "Lower wages, stricter job requirements, and limited access to affordable transit all add up to greater pressure."

In Massachusetts, young adults are struggling disproportionately with car debt. 4.37% of young borrowers are behind on their auto loans—nearly 50% higher than the state average. Among young adults in communities of color, the delinquency rate spikes to 8.81%, almost triple that of white borrowers.

"Young buyers and immigrants often face stricter loan terms and higher interest rates," explains Wang, "even for used cars." Jimmy Yang, a 34-year-old delivery driver from China living in Allston, has experienced this pressure firsthand. Two years ago, he bought a new Toyota with a monthly loan payment of about $300—not including insurance—while earning about $1,400 a month as a delivery driver. "I don't even drive it for deliveries now. I just use an e-bike," Yang said. "The car is more like a burden—I still have to pay the loan every month even though it's parked most of the time."

Rethinking Mobility — and Money

Bourassa said MAPC and the MBTA have launched several efforts to make travel more affordable and less car-dependent. These include free bus pilot programs in Mattapan and Dorchester and expanding Bluebikes and EV infrastructure through a $21.6 million federal grant. “This grant will provide more options for people to get around without relying on a car and will make a dent in Boston's status as one of the most congested cities,” he said.

Still, transportation reform only addresses part of the problem. For many young Bostonians, the deeper issue lies in how car ownership has become inseparable from debt. “Too often, young borrowers take out long-term car loans without realizing how interest and insurance add up,” said Victor Wang. “They're doing what they need to get to work or school, but the payments can quickly outgrow their income. We see it every week.”

Shell emphasized that the real cost of car ownership extends far beyond monthly payments. Through her work with immigrant clients at Boston Medical Center, she's seen borrowers locked into 75-month loans with $800 monthly payments. "They're paying $20,000 just in interest alone over six years," she said. "That's money that could go toward building wealth, saving for a house, or just cost of living."

For young people considering a car loan, Shell offers practical advice: explore all alternatives first. "Can you live close to your job? Can you use public transportation while you build savings and credit?" she asked. "Boston has great resources through Boston Builds Credit that can help you build a strong credit score without going into debt. The question isn't just whether you can afford the monthly payment—it's whether a car loan will prevent you from building the future you want."