P&A Providers & Administrators
MenuMENU
SearchSEARCH

Affordability of New and Used Vehicles Falls

Interest rates increasing the costs, with no end in sight, Edmunds finds.

October 4, 2023
Affordability of New and Used Vehicles Falls

Several record highs were set in the third quarter, including the average used-vehicle down payment of $4,111.

IMAGE: Pexels/Raten Kauf

2 min to read


In the third quarter, vehicle borrowing costs reached highs last seen during the Great Recession, while average monthly payments hit records, according to Edmunds findings.

The average annual percentage rate for new vehicles rose three percentage points quarter-over-quarter to 7.4% as the used-vehicle average APR increased two points to 11.2%.

Ad Loading...

"Spiked interest rates remain the biggest impediment to affordability in both the new and used car markets today,” said Edmunds Head of Insights Jessica Caldwell.

Meanwhile, the percentage of borrowers with monthly payments for a new vehicle of at least $1,000 reached a record high of 18%, surpassing the previous record of 17% in the second quarter. The average monthly payment also broke a record at $736.

The average down payment on a used vehicle set a record, too, at $4,111, Edmunds said.

The end of the vehicle affordability quandary may not be in sight, Caldwell said, citing potential additional interest rate increases and the United Auto Workers strike in Detroit. The strike, she pointed out, could "wipe out any inroads made on inventory and the return of incentives, further elevating pricing,” at least for the big three automakers based there.

Zero-percent financing, though still being advertised in places to “draw shopper attention,” has all but disappeared, Edmunds pointed out, representing just 1% of third-quarter transactions after peaking in the second quarter of last year at 24%.

Ad Loading...

Originally posted on Auto Dealer Today

More Industry

Orange electric vehicle charging station.
Industry•by Lauren Lawrence•October 20, 2026

Charger Network Growth Slows

Despite a projected increase in public EV chargers in 2026, charging infrastructure remains a top concern for consumers as the gap between the most and least EV-friendly places remains substantial.

Read More →
Fan of $100 bills atop a white envelope
Industry•by Hannah Mitchell•October 13, 2026

Lenders, Consumers Take on More Auto Loan Risk

September records loosened credit access the most in over a decade as buyers took advantage of the conditions to afford trading, though loan applications fell.

Read More →
Red type R Honda civic parked on road.
Industry•by Lauren Lawrence•October 13, 2026

Next-Gen Hybrids in Sight

Dealerships can expect to see revamped hybrids from Honda next year as the company rolls out a new system and model lineup.

Read More →
Ad Loading...
Dodge ram emblem on orange vehicle exterior
Industry•by Hannah Mitchell•October 6, 2026

Gem State Stores Change Hands

A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.

Read More →
Graphic of model car driving on fake road.
Industry•by Lauren Lawrence•October 6, 2026

Charging In Motion

Honda has been researching wireless in-motion charging for electric vehicles since 2025, and new technology developments have put it a step closer to a final product.

Read More →
front grill of a Ford truck with blue Ford emblem
Industry•by Lauren Lawrence•September 30, 2026

Twin Cities Stores Sell

Minnesota-based Walser Automotive Group made what it called the most significant acquisition in its history with a three-rooftop deal in Minneapolis.

Read More →
Ad Loading...
Diesel engine on a production line in a factory
Industry•by Hannah Mitchell•September 29, 2026

U.S. Auto Sales Still Below Prepandemic Levels

Mobility Global industry observers don’t expect the market to return to the higher volumes that became routine before Covid but to stay well below its potential.

Read More →
Front of red tesla car.
Industry•by Lauren Lawrence•September 22, 2026

The Powertrain Shift

Electric-vehicle owners are backpedaling, according to new data, with product availability driving many to shift back to gas-powered engines.

Read More →
White BMW SUV driving on road.
Industry•by Hannah Mitchell•September 15, 2026

Achromatic Autos

The shades that dominate the U.S. car market don’t call attention to themselves, though grayscale may have plateaued after a 30-year upswing, research shows.

Read More →
Ad Loading...
Line of eclipse SUVs in parking lot.
Industry•by Lauren Lawrence•September 15, 2026

Used-Vehicle Affordability Worsens

Listing prices in August defied seasonal trends, rising above $27,000 for the second time this year.

Read More →