SANTA MONICA, Calif. — December car buyers enjoyed the lowest-ever annual percentage rates (APRs) on their auto loans, according to data gathered by

The average auto loan carried an APR of 4.16 percent in the final month of the year, down 0.33 points from November and 0.55 points from December 2009. An estimated 15.4 percent of all auto loans carried zero interest, the third highest monthly pace in 2010.

And while so many of last month’s car buyers enjoyed no interest rates on their new vehicle loans, many more still managed to avoid exceptionally high APRs. Only 4 percent of all auto loans carried an APR higher than 10 percent in December, the lowest proportion seen by since it started gathering data in this category in 2004.

A major contributor to the low December interest rates was the luxury market, which is generally driven by an affluent, fiscally stable set of consumers. The average APR for financed sales of the top seven luxury brands last month was 2.9 percent, the lowest monthly rate of 2010. This capped a year in which the average APR in the luxury segment steadily dropped each month since February.  

“December brought many financially sound consumers back into the market,” said Ivan Drury, analyst at “Deal-seekers are generally cautious about their spending and they likely wouldn’t enter the market unless their confidence was complemented by the right incentives.”

Buick led all makes with the highest rate of financed sales at zero percent APR. More than half of the GM brand’s financed sales generated no-interest loans, its highest monthly showing since June 2008. Toyota placed second for the month with 40 percent of their financed sales at zero percent APR, while Cadillac placed third in December with one out of every three financed sales enjoying zero percent APR.

The attractive financial environment combined with increased consumer confidence also drove more shoppers to lease new vehicles. December’s lease penetration climbed to 23.6 percent, the highest monthly rate since November 2005.