May 26, 2018

Interest Rates on New Cars Hit High Featured

By Staff Writer March 05, 2018

Interest rates on new vehicle finance are expected to soar to their highest point in eight years in February, according to Edmunds.


The annual percentage rate on new financed vehicles averaged 5.2 percent in February, compared to 4.9 percent in 2017 and 4.4 percent five years ago. Edmunds expects a decrease in the number of loans in the 2-percent to 3-percent APR bracket and an expected increase in loans in the 4- to 7-percent range as the driving force behind this rise in the average.


The percentage of sales with interest rates between 0 percent and 2 percent is expected to remain steady at 22 percent in February, compared to 21 percent in February 2017. On the opposite end, the number of sales with interest rates above 7 percent is also expected to remain steady at 19 percent in February, compared to 18 percent in February 2017.


Edmunds’ analysts say that higher interest rates and near-record high lease returns could also be a contributing factor toward lease penetration levels hitting an all-time high of 33.5 percent in February.

Last modified on Monday, 05 March 2018 01:25