US Car Loan Payments And Interest Rates Reach 10-Year High Thanks To Trucks, SUVs

The new vehicle market in the US is now facing the highest average car loan payment (along with interest rates) in a decade, mostly due to the surging interest in trucks and SUVs, according to Edmunds.

The study showed that customers weren’t willing to purchase one of the new compact or midsize vehicles instead of a bigger truck or SUV in order to lower their payments, pushing the average interest rate on new-car financing at 6.3 percent in February, which is the highest since the same month in 2009.

Out of all the financed deals, only 3.2 percent had no interest, compared to the 8.3 percent achieved in February 2018. In addition, only 18 percent of buyers got a rate of less than 3 percent compared to over 25 percent of shoppers last year.

With prices and interest rates on the rise, more and more customers are being pushed out of the new car market but most of them don’t want to change the type of car they initially wanted.

“We really haven’t seen people make too many concessions in the style of vehicle they’re looking for. While there’s alternatives out there that are more affordable, it doesn’t look like that’s where shoppers are flocking,” Jeremy Acevedo, Edmunds’ manager of industry analysis told AutoNews.

Customers are now placing bigger down payments to offset the costs of the vehicles they aren’t willing to compromise on, raising the average down payment by 6.6 percent to $4,187. The average amount financed is now $32,071, a 2.4 percent increase, while the average transaction price of a new car is $36,331, over 4 percent more than before.

Car leases that end in 2019 will face a significant price hike as well, with a record 4.3 million customers expected to pay as much as 26 percent more than they did back in 2016. The increase is mostly blamed to weakening residuals, record-high prices and the rising interest rates.

For example, the 2019 Toyota Camry SE, one of the most popular models leased in the US, costs $2,834 more on average over the course of a 36-month lease, a 26 percent increase.

more photos...
  • LJ

    This bubble, like the housing bubble of 2009, will inevitably implode.

  • db

    We all know how this story will end…

  • Mr. EP9

    And there is also a record number of delinquencies as well as people are falling behind IIRC. Not a good sign.

Pickup Truck Tries To Cross To The Opposite Lane, Ends Up Slamming Into Camry

We imagine this pickup truck driver in Canada was left rather red-faced after this crash.

2019 Mercedes-Benz CLA: More Than Just A Pretty Face?

The second-gen CLA is certainly more stylish than its predecessor, but has it improved in other areas too?.

Mazda CX-7 Almost Takes Out Two Cars While Doing A U-Turn

This CX-7 driver came very close to taking out the cammer and a Toyota MR-2, then lost it and hit the median.

2020 Range Rover Evoque: Can It Trump The Audi Q3 And Volvo XC40?

Premium compact SUVs have a familiar-looking, yet brand new challenger to the throne: the second-gen Evoque.

1967 Honda S800 Is The S2000’s Grandfather, Revs To 10,000 RPM

You could buy this mint S800 for about the cost of a new Ford Fiesta in the UK.

New Red Bull Racing Signing Pierre Gasly Finds 2019 Car A Tough Nut To Crack

RBR team boss Christian Horner says Gasly must refine his driving style to get the best out of his ride.

You Know You Want This 10K-Mile 1994 Supra Turbo – But Can You Afford It?

This twin-turbo Supra seems to be in all original, and pretty fine, condition, but it has a six-figure price tag.

Modern Take On Iconic Mercedes-Benz CLK GTR Looks Absolutely Spot-On

If the Mercedes-Benz CLK GTR and AMG One had a baby, it could look like this.

Aston Martin Vantage V12 Zagato Is Back, Gains Gorgeous Speedster Variant

Only 38 units of the resurrected Vantage V12 Zagato will be made: 19 Coupés and 19 Speedsters.

This Mercedes Driver In New Jersey Parked On Top Of A Toyota

According to the Maywood Police Department, the Merc driver pressed the gas pedal instead of the brake.