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Auto Loans Follow Interest Rate Hikes

APR for new cars hits 3-year-plus high.

November 3, 2022
Auto Loans Follow Interest Rate Hikes

Average amount financed for new cars hit an all-time high in the third quarter at $41,347.

Credit:

IMAGE: Getty Images/Artur Charkin

1 min to read


Climbing car loan rates are adding to automakers’ compounding headaches, as rising interest rates jack up the cost of buying.

The average percentage rate for new-car loans in October clocked in at 6.3%, up from 5.9% in September and the highest rate since April 2019.

That’s on top of already higher sticker prices due to low inventories brought about by supply scarcity and shipping bottlenecks that have plagued the industry since the start of the Covid pandemic.

"With new vehicle purchases, automaker subsidies offer a bit of relief, but even those are far less generous than before,” said Edmunds Executive Director of Insights Jessica Caldwell in a news release. “Consumers heading into the car market may be aware of high prices but also need to brace themselves for a different experience in the F&I office."

Edmunds reports that the average amount financed for new cars hit an all-time high in the third quarter at $41,347, up from $40,602 in the second quarter and $38,315 a year earlier.

READ MORE: Q3 Ally Car Loan Applications Down But Value Unchanged

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