Search

Auto loan rates surged to their highest since 2019 - Axios

jokbanga.blogspot.com
Data: Edmunds; Chart: Axios Visuals
Data: Edmunds; Chart: Axios Visuals

The automobile market still hasn't fully recovered from pandemic-era supply disruptions — and now rising interest rates are also clobbering affordability.

The big picture: Vehicle sales are at lows not seen in a decade, and buyers are shelling out record amounts for new SUVs, cars and trucks.

  • The average annual percentage rate on a new vehicle loan rose to 5.9% in September, from 4.1% last December. APRs are now at their highest level since 2019, according to new data from Edmunds.

By the numbers: The average monthly payment on a new vehicle hit a high of $703 during the quarter.

  • The amount that buyers financed for a new vehicle reached an all-time high of $41,347, compared to $38,315 last year.
  • Rates are pricier for used car loans — the average is 9.2%, according to data from Edmunds.
  • 14% of borrowers in Q3 committed to paying $1,000 or more a month on their car loan — compared to 8.3% in 2021.

What's happening: Inventory is still low due to lingering supply chain snags. Demand, though down from the giddy highs of 2021, remains elevated.

  • Some of it is pent-up, as it's been hard to buy a car these past few years.
  • Automakers are still feeling optimistic about sales holding up, reports the WSJ. As a result, they aren't subsidizing loans as much as they used to — there's no need for that, with inventories so low.
  • "Gone are the days of 0% financing on new vehicles," the WSJ wrote.
  • And, of course, rates overall are going up because the Federal Reserve is hiking rates to squash demand.
Data: Bureau of Economic analysis via FRED; Chart: Axios Visuals
Data: Bureau of Economic analysis via FRED; Chart: Axios Visuals

This isn't just a supply chain story. Even before the pandemic, Americans were spending more on vehicles and increasingly buying expensive SUVs and trucks.

  • "We're Americans — we want bigger and better, more stuff, more bells and whistles," says Jessica Caldwell, an analyst at Edmunds.
  • In 2010 about half of all vehicles Americans bought were cars, according to Edmunds data. In the first half of 2022 — even when gas prices were surging — cars were just a quarter of purchases. SUVs comprised 55%, and trucks, 20%.

What to watch: How long demand can hold up as consumers deal with record inflation as the Fed keeps raising rates to cool the economy.

Adblock test (Why?)



"auto" - Google News
October 05, 2022 at 06:28PM
https://ift.tt/1rlnkp0

Auto loan rates surged to their highest since 2019 - Axios
"auto" - Google News
https://ift.tt/xqt2j9G
https://ift.tt/hxRj7Wr

Bagikan Berita Ini

0 Response to "Auto loan rates surged to their highest since 2019 - Axios"

Post a Comment

Powered by Blogger.