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Amount Financed Down, Interest Rates Up, Fed Reports

October 21, 2008

WASHINGTON — The average amount financed on U.S. new-vehicle purchases declined in August, according to the latest Federal Reserve Statistical Release. The figure dropped to $26,920 per vehicle, down from $27,582 in July, but up from $25,493 at the end of the second quarter. The loan-to-value ratio (LTV) on new-vehicle deals fell by 13 points from July to reach 88 percent, representing the lowest figure this year.

Average loan maturity for August was 64.6 months, a decline from July’s 67.2, but slightly above the 63.5 mark recorded at the end of the second quarter.

Interest rates on new-car purchases moved closer to their May and June values. The August rate rose to 5.11, up from the July rate of 3.28 percent. Nonrevolving consumer credit, which includes auto loans, rose at an annual rate of 5.4 percent (or $1.6 trillion) in August.

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