Fed announces fourth consecutive ‘jumbo’ increase in effort to slow inflation.
CEO acknowledges that greater market woes may be on the horizon.
As auto loans and credit apps rise, it appears Americans are more willing to take on debt.
TransUnion study finds borrowers used auto loan deferments as a safety net during the COVID-19 crisis.
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.
With September in the books, Edmunds reported this week that interest rates have stayed above 5% for eight months in a row and now mirror levels not seen since before the Great Recession.
Two years ago, zero percent finance deals accounted for 14.6% of transactions. Last month, they only accounted for 7.4%. Edmunds analysts point to higher interest rates as one of the reasons for the scarcity in zero percent finance deals in August.
Fourth-quarter loan balances reached an all-time high for the third year in a row, but records broken for amounts financed and monthly payments raise affordability concerns.
Auto financing extended to subprime and deep-subprime car buyers fell 4.5% from a year ago, as the auto finance industry continued to squash fears of a forming subprime bubble. Newly originated loans made to prime car buyers jumped 2% to encompass nearly 60% of auto loans originated during the period.
Total auto loan balances in the third quarter grew 9% from a year ago to $1.1 trillion, with subprime balances leading the way, TransUnion reported on Monday.
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