Auto Loan Interest Rates Hit 10-Year High
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.

Only about 4% of all new-vehicle loans carried a zero percent interest rate in March, a sharp decline from 7.44% in the same month a year ago and 7.59% in March 2014.
Photo by RawPixel via Pixabay
SANTA MONICA, Calif. — Car shoppers looking to get a break from rising interest rates didn’t find it in March, as the average interest rate on a new-vehicle loan hit its highest level in a decade. According to the latest report from Edmunds, the annual percentage rate on new financed vehicles is expected to average 6.36% in March, compared to 5.66% last year and 4.44% five years ago.
Analysts noted that buyers were able to find more zero percent finance offers in March compared to the first two months of the year, but these deals are much harder to come by than they have been historically. About 4% of all financed deals in March had zero percent interest rates, compared to 7.44% last year and 7.59% in 2014.
“Things just keep getting tougher for new-car shoppers,” said Jessica Caldwell, executive director of industry analysis. “Interest rates have crept up every month so far this year, and new-vehicle prices continue to hover near record highs. We’re on the cusp of what could be a pretty dramatic shift in the market, simply because a big chunk of buyers are getting priced out.”
Edmunds experts note that, in the first quarter of this year, an increasing number of car buyers are being pushed into higher financing brackets. Edmunds data reveals that shoppers receiving interest rates of 10% or higher constituted 14.1% of the market in March, the highest level seen since February 2008.
“It’s pretty alarming to see that a sizable segment of new-car shoppers are financing cars at rates that we’d normally associate with used vehicle purchases,” said Caldwell. “The good news is that the Fed has halted rate hikes for now and we’re edging closer to the summer selldown season, when the number of incentive offers starts heating up. But without automakers stepping in to offer a reprieve, interest rates around 6% are likely the new normal.”
Originally posted on F&I and Showroom
More Industry

Ownership Priorities are Shifting
A new survey shows that in the U.S. vehicle quality for generation Z is largely defined by advanced safety features, intuitive technology and premium sound systems.
Read More →
Pump Price Jump Calculated
ISeeCars.com examined fuel costs for different power trains, finding which ones have experienced the biggest hits since the war in Iran commenced.
Read More →
Black Book: Weekly Market Update
Wholesale values fell last week despite the spring season still being in the traditional full-gear mode, analysts said.
Read More →
Arkansas Auto Group Acquires First Indiana Rooftop
Performance Brokerage Services represented both the buyer and seller in the sale of Carver Toyota of Columbus by Carlock Automotive Group.
Read More →
Stellantis to Dive Into U.S. Lending
The multinational maker of Chrysler, Dodge, Jeep, Ram and multiple other brands received conditional approvals for a Utah-based industrial bank.
Read More →
New-Vehicle Prices Rise
With April sales down, higher prices on in-demand large vehicles helped inflate the overall ATP, though increases were under long-term averages, Cox Automotive reported.
Read More →
Black Book: Weekly Market Update
Last week in the wholesale automotive market proved to be a mixed bag, analysts reported.
Read More →
Black Book: Weekly Market Update
Conversion rates were flat last week at 63%, Black Book analysts calculated, as low-mileage and almost-near units outpaced the overall market.
Read More →
EU Auto Association Urges Action
Trade relations between the European Union and the U.S. are at risk, causing the European Automobile Manufacturers Association to push lawmakers to make a decision.
Read More →
Driving into the Super CFC Era
Understanding the risks and benefits of retail accounting and Super CFCs can help you better present options to your dealer partners.
Read More →