More than 100 million Americans are trapped in $1.6trn car debt, larger than Saudi Arabia’s economy

Cars once stood as the ultimate American dream. Today, for more than 100 million Americans, that dream has turned into a debt trap worth $1.6 trillion, larger than the economy of Saudi Arabia ($1.14 trillion).

Once symbols of escape, cars now bind households to rising costs, endless commutes, and shrinking opportunities. Instead of opening doors, they drain wallets and lock families into lifestyles many can no longer afford.

“Driving has gone from freedom to financial confinement,” said Richard Molina, an urban mobility researcher at Columbia University. “Car debt is shaping the future of American households in ways we can no longer ignore.”

The true cost of mobility

The average new car in the United States now costs close to $53,000, while used cars average $28,000. But the price tag is only part of the story. Fuel, insurance, repairs, and parking often double the real cost. Over a lifetime, the average American family will spend more than $750,000 just to stay on the road.

Economists warn that this spending comes at the expense of homeownership, education, and entrepreneurship. “$1.6 trillion in car debt represents not just numbers, but lost opportunities,” said Sarah Ng, an economist at the Brookings Institution. “That’s capital that could power small businesses or build long-term wealth.”

Nearly half of auto loans are now “underwater,” meaning borrowers owe more on their cars than those cars are worth. The financial treadmill leaves many with no exit, unable to sell, unable to save, and unable to move forward.

A toll beyond dollars

Cars also exact a deadly price. Globally, road crashes kill one in 34 people each year and injure more than 100 million. In the U.S., the burden falls hardest on the poor, the elderly, and Black Americans.

Transport emissions are now the largest source of climate pollution in the U.S. and Europe. The impacts—ranging from heart disease to fertility decline, are borne most by communities near highways and industrial corridors.

“The freedom to drive has come at the cost of others’ right to clean air and safe streets,” said Dr. Maria Alvarez, a public health expert.

A manufactured dependency

Car dependency was not inevitable. Mid-20th-century cities offered buses, trains, trams, and walkable neighbourhoods but decades of subsidies, highways, and cheap loans built landscapes around cars.

By the 2020s, Americans were driving 3.2 trillion miles annually. The industry, meanwhile, sold not just machines but identities: independence, sophistication, rebellion. This resulted in a system that equates freedom with consumption, even as it narrows choices and multiplies risks.

Beyond the car myth

Experts argue the next chapter of American freedom will not be written on the highway. Instead, it lies in expanding affordable public transit, safer cycling routes, and walkable communities. While electric vehicles may lower emissions, they still lock families into costly debt and sprawling cities.

“Freedom isn’t the absence of limits,” said co-author Henrietta Moore. “It’s the presence of opportunity, the ability to live a healthier life, to save for the future, and to connect without breaking the bank.”

If cars were once America’s dream, the growing weight of $1.6 trillion in car debt shows how that dream has hardened into dependence. The question now is whether the nation can reclaim freedom; not through faster engines, but through fairer choices.

[Source: Fortune]

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