Shifting Economy Sends Auto Loan Rates Up
New- and used-vehicle averages jumped in late January, though they peaked in the fall.
Late last month, the average new-vehicle loan rate rose more than 50 basis points to 9.7% and up 130 basis points year-over-year.
IMAGE: Pexels/RDNE Stock project
Greater economic trends led to higher auto loan rates in January as the Federal Reserve keeps its interest rate adjustments in neutral for now.
The increase followed a rise in bond yields resulting from the combination of eased inflation and a slowed yet still strong economy, Cox Automotive’s chief economist said.
The Fed announced Wednesday that it would leave interest rates unchanged but said it’s not ready to cut rates, either, until inflation falls toward its 2% target. It had earlier hinted of cuts this year after a long series of hikes in 2023 to dampen inflation.
Auto loan rates spiked last year due to the increases, compounding already high auto consumer costs from inflated vehicle prices brought on by pandemic conditions.
Late last month, the average new-vehicle loan rate rose more than 50 basis points to 9.7% and up 130 basis points year-over-year, according to Cox, which said it peaked in October at just under 10%.
Meanwhile, the average used-vehicle loan rate rose more than 30 basis points to just over 14%, up 120 basis points year-over-year, Cox said. It peaked in November at 14.35%.
Originally posted on Auto Dealer Today
More Industry
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 →
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 →
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 →
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 →
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 →
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 →
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 →
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 →
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 →
Used-Vehicle Affordability Worsens
Listing prices in August defied seasonal trends, rising above $27,000 for the second time this year.
Read More →