Auto Loan Interest Rates Hit 10-Year High
Edmunds says the average APR for a U.S. new-vehicle loan was 6.36% in March, putting dealers and consumers on the cusp of a ‘dramatic shift’ toward the used-car market.

Only about 4% of all new-vehicle loans carried a zero percent interest rate in March, a sharp decline from 7.44% in the same month a year ago and 7.59% in March 2014.
Photo by RawPixel via Pixabay
SANTA MONICA, Calif. — Car shoppers looking to get a break from rising interest rates didn’t find it in March, as the average interest rate on a new-vehicle loan hit its highest level in a decade. According to the latest report from Edmunds, the annual percentage rate on new financed vehicles is expected to average 6.36% in March, compared to 5.66% last year and 4.44% five years ago.
Analysts noted that buyers were able to find more zero percent finance offers in March compared to the first two months of the year, but these deals are much harder to come by than they have been historically. About 4% of all financed deals in March had zero percent interest rates, compared to 7.44% last year and 7.59% in 2014.
“Things just keep getting tougher for new-car shoppers,” said Jessica Caldwell, executive director of industry analysis. “Interest rates have crept up every month so far this year, and new-vehicle prices continue to hover near record highs. We’re on the cusp of what could be a pretty dramatic shift in the market, simply because a big chunk of buyers are getting priced out.”
Edmunds experts note that, in the first quarter of this year, an increasing number of car buyers are being pushed into higher financing brackets. Edmunds data reveals that shoppers receiving interest rates of 10% or higher constituted 14.1% of the market in March, the highest level seen since February 2008.
“It’s pretty alarming to see that a sizable segment of new-car shoppers are financing cars at rates that we’d normally associate with used vehicle purchases,” said Caldwell. “The good news is that the Fed has halted rate hikes for now and we’re edging closer to the summer selldown season, when the number of incentive offers starts heating up. But without automakers stepping in to offer a reprieve, interest rates around 6% are likely the new normal.”
More Auto Finance

Interest Rates Further Squeeze Auto Consumers
Last month’s hike and a potential second increase this month add to a growing list of inflation woes that could continue to dent overall car sales.
Read More →
Mind Your Process
Consistent steps taken in various aspects of the F&I office can make valuable differences over time, similar to an outline for a best-selling book.
Read More →
Top Five Credit Application Fraud Flags
Compliance audits regularly reveal bad habits that can lead to fraud charges and should have been stamped out decades ago.
Read More →
More Auto Loans for the Taking in August
Riskier categories were on the uptick for the month as lenders loosened access in several areas while balancing out the exposure in another, Cox Automotive reported.
Read More →
July Was Hot for Auto Borrowers
Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Auto Refi Savings Surge
Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.
Read More →
Subaru Enters Lending Business
The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.
Read More →
Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
Read More →
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →