New-Vehicle Purchase Impact Breaks Records
Consumers paying more and more as interest rates stretch costs to new highs.

Over 12% of borrowers went with 36- or 48-month loan terms in the first quarter, the highest since the fourth quarter of 2009.
IMAGE: Pixabay/Rauten-Kauf
The average annual percentage rate for new-car financing has reached a 15-year high, Edmunds says.
The first-quarter average hit 7%, the highest rate since the same quarter in 2008.
One bright spot is that the latest average was flat in March after 14 consecutive months of increases. Edmunds credited that to a small uptick in manufacturer financing subsidies.
The quarter’s average monthly new-car payment, though, hit a record high of $730, up year-over-year from $656, Edmunds said. It noted another record in the percentage of people financing a new car with a monthly payment of at least $1,000: 16.8%. That was up year-over-year from 10.3%.
Meanwhile, the average down payment for new models was also a record for the quarter at $6,956.
Dealers can try to make the best of the situation by tying their marketing to incentives and interest rates, said Edmunds Executive Director of Insights.
“Since interest rates are at the forefront of consumers' minds, any automaker or dealer that can advertise incentives related specifically to interest rates will likely get more attention,” she said in a press release. “This could be a powerful marketing tool that would enable sellers to tap into the significant pent-up demand that has been building over the past few years and convert that demand into actual sales."
The higher rates and monthly payments mean that more vehicle buyers are opting for longer loan terms to make their purchases better fit their budgets, Edmunds said.
“More car shoppers are being pushed to the extreme ends of the finance terms spectrum,” its quarterly report said.
It noted that 12.3% of borrowers went with 36- or 48-month loan terms in the first quarter, the highest since the fourth quarter of 2009, and that most consumers are extending loan terms out as much as possible.
LEARN MORE: Fed Continues Interest Rate Increases
Originally posted on Auto Dealer Today
More Auto Finance

Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Auto Lenders, Consumers on a Tightrope
April borrowing data shows that more consumers are bending over backward to buy vehicles, though subprime lending cooled off for the month.
Read More →
Toyota Financial Services President Replaced
Scott Cooke has served in various roles with Toyota Financial Services for over 20 years, including president and CEO, which he retires from on June 30.
Read More →