Auto Loan Interest Rates Increased Slightly in March, According to Edmunds
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% in March, compared to 5.6% in February.
Edmunds data reveals that the share of sales with 0% finance deals saw a slight uptick in March, constituting 4.7% of new vehicle purchases compared to 3.6% in February.
“Automakers reacted quickly to the coronavirus crisis with attractive incentive offers and payment programs, but these unfortunately appeared to fall on deaf ears,” said Jessica Caldwell, executive director of insights at Edmunds. “Consumers were understandably distracted by the rapidly changing news cycle and changes to everyday life created by shelter-in-place orders, and March sales took a blow.”
Edmunds experts note that the share of sales with APRs of 10% or higher saw a lift in March, constituting 12.8% of sales compared to 10.7% 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% in March, compared to 32.8% in February.
“Vehicle purchases made in March — particularly the second half — were likely need-based,” said Caldwell. “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.”
Find out more at www.edmunds.com.
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