High interest rates put new car buyers in a financial squeeze this year, according to an Edmunds report. The average new-vehicle Annual Percentage Rate (APR) during the third quarter of 2024 remained elevated at 7.1%, the data showed, marking the sixth consecutive quarter that new-vehicle APRs have hovered above 7%. "Q3 was unfortunately the same old story as the first half of 2024 in terms of auto financing conditions," said Jessica Caldwell, Edmunds' head of insights. "Car shoppers found little relief from the elevated interest rates and high prices, which in turn hindered new-vehicle sales growth," she added. "The Fed's decision to cut rates was a welcome update at the end of the quarter but, on its own, is unlikely to dramatically change the financial landscape for car buyers." Key insights from the study include:
  • 0% finance deals remain nearly impossible to find (or qualify for): 0% finance deals accounted for just 3% of all new financed vehicle purchases in Q3 2024.
  • Consumers continue to sign up for longer loan terms in order to stomach higher prices: 69% of new-vehicle loans had terms over 60 months in Q3 2024.
  • New-vehicle shoppers are taking on $1,000+ monthly payments at near-record levels: The share of consumers taking on loans with new-vehicle monthly payments of $1,000 or more was 17.4% in Q3 2024, marking the sixth consecutive quarter that the share of $1,000+ monthly payments was above 17%.
  • A majority of car shoppers are holding off on purchasing their next vehicle because of high interest rates: Edmunds conducted a survey in August 2024 among car shoppers who have purchased a vehicle previously and have indicated they are planning on purchasing a vehicle in the next 12 months. 62% of the respondents stated that they have held off on buying a new vehicle because of high interest rates.
The slideshow above illustrates states where auto loan rates increased the most as selected by WalletHub. See also:

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Joe Toppe

Joe Toppe serves as managing editor of PropertyCasualty360.com. Joe is also a father of three, an author, and longtime lover of baseball.

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