Unrelenting borrowing costs continue to make buying new & used cars a challenge for many consumers, according to Edmunds. This is why we need a rate cut as discussed in this post.
Edmunds Post Highlights
- The new-vehicle APR (car loan rate) increased +1.7% from 2Q23 to 7.4%, while used-vehicle rates jumped +2.2% to 11.2%.
- Notably, both new & used APRs reached points not seen since the Great Recession (new-vehicle APR at 7.5% in 2Q07 & used-vehicle APR at 11.4% in 4Q07).
- The share of consumers who financed a new vehicle with a monthly payment of $1k+ increased to a new all-time high of 17.5% and the average monthly payment on a new vehicle reached an all-time peak of $736.
- The average down payment for used vehicles reached a record $4,111 high, and correspondingly, the average amount financed for both new & used vehicles declined slightly to $40,149 & $29,328, respectively.
- Edmunds noted that the ongoing UAW strike could wipe out any domestic inroads made on inventory while also preventing the return of incentives, further elevating pricing.
- Notably, 0% financing deals reached a peak in 2Q20 at a 24% mix & has subsequently declined to just 1.1% of 3Q23 transactions.