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Amount Financed Falls, Interest Rates Rise, Reports Federal Reserve

November 12, 2008

WASHINGTON — The average amount financed on U.S. new-vehicle purchases declined in September, according to the latest Federal Reserve Statistical Release. The figure dropped to $25,427 per vehicle, down from $26,920 in August, and the lowest figure in the third quarter 2008. The loan-to-value ratio (LTV) on new-vehicle deals fell by 3 points from August to reach 85 percent, representing the lowest figure this year.

Average loan maturity for September was 64.3 months, a slight decline from August’s 64.6, but below the 65.4 average for the third quarter 2008.

Interest rates on new-car purchases climbed in September to 6.24 percent. The rate is up from the 5.11 recorded in August and the 3.28 posted in July. Nonrevolving consumer credit, which includes auto loans, fell to an annual rate of 4.4 percent (or $1.6 trillion) in September.

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