New-Car Loan Rates Tick Up

By Staff Writer April 02, 2020

The average interest rate for a new-vehicle loan rose slightly in March, according to the car shopping experts at Edmunds. The annual percentage rate (APR) on new financed vehicles averaged 5.8 percent in March, compared to 5.6 percent in February. Edmunds data reveals that the share of sales with 0 percent finance deals saw a slight uptick in March, constituting 4.7 percent of new-vehicle purchases compared to 3.6 percent in February.

Edmunds experts note that the share of sales with APRs of 10 percent or higher saw a lift in March, making up 12.8 percent of sales compared to 10.7 percent in February. Loan term lengths also increased in March, surpassing 70 months for the first time on record. According to Edmunds data, the share of borrowers who had a 73- to 84-month loan term rose to 35.3 percent in March, compared to 32.8 percent in February.

“Vehicle purchases made in March — particularly the second half — were likely need-based,” said Jessica Caldwell, executive director of insights at Edmunds. “These shoppers might not have necessarily qualified for zero percent finance offers but still needed a car in spite of everything else going on in the world.”

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Last modified on Friday, 03 April 2020 14:07

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