agent Entrepreneur logo
MenuMENU
SearchSEARCH

Affordability of New and Used Vehicles Falls

Interest rates increasing the costs, with no end in sight, Edmunds finds.

October 4, 2023
Affordability of New and Used Vehicles Falls

Several record highs were set in the third quarter, including the average used-vehicle down payment of $4,111.

IMAGE: Pexels/Raten Kauf

2 min to read


In the third quarter, vehicle borrowing costs reached highs last seen during the Great Recession, while average monthly payments hit records, according to Edmunds findings.

The average annual percentage rate for new vehicles rose three percentage points quarter-over-quarter to 7.4% as the used-vehicle average APR increased two points to 11.2%.

Ad Loading...

"Spiked interest rates remain the biggest impediment to affordability in both the new and used car markets today,” said Edmunds Head of Insights Jessica Caldwell.

Meanwhile, the percentage of borrowers with monthly payments for a new vehicle of at least $1,000 reached a record high of 18%, surpassing the previous record of 17% in the second quarter. The average monthly payment also broke a record at $736.

The average down payment on a used vehicle set a record, too, at $4,111, Edmunds said.

The end of the vehicle affordability quandary may not be in sight, Caldwell said, citing potential additional interest rate increases and the United Auto Workers strike in Detroit. The strike, she pointed out, could "wipe out any inroads made on inventory and the return of incentives, further elevating pricing,” at least for the big three automakers based there.

Zero-percent financing, though still being advertised in places to “draw shopper attention,” has all but disappeared, Edmunds pointed out, representing just 1% of third-quarter transactions after peaking in the second quarter of last year at 24%.

Ad Loading...

Originally posted on Auto Dealer Today

More F&I

Joel Kansanback standing on green backlit stage at Agent Summit
F&Iby Hannah MitchellAugust 18, 2026

Get Ahead of the Change

A strong culture, among other things, will be a key differentiator for auto dealerships as the market speeds ahead to new heights, says industry veteran Joel Kansanback.

Read More →
Photo of a man in a suit shaking hands with a man across a desk
F&Iby David R. IbarraAugust 13, 2026

F&I Without the Handoff

Get more familiar with what your dealer clients are really buying when they entrust you with finance-and-insurance.

Read More →
white background with white car and stacks of coins
F&Iby Lauren LawrenceAugust 6, 2026

Affordability Shapes Auto Demand

Auto originations increased 1% in the first quarter, and electric vehicles are rebounding, according to TransUnion's latest credit report.

Read More →
Ad Loading...
Two businessmen shaking hands as one holds an electronic pad
F&IAugust 1, 2026

The Evolution of Agency Development in Modern F&I

General agents have a different roadmap for success than their predecessors. It will pay for them to follow it in order to be true dealer partners.

Read More →
Tiny toy car falling out of jar of coins. “The $1K Payment”
F&Iby Lauren LawrenceJuly 17, 2026

Four-Figure Loan Payments on the Rise

A LendingTree analysis found that location, age and credit score play a role in the rising amount of auto loan borrowers who make monthly payments of $1,000 or more.

Read More →
Headshot photo of smiling businesswoman
F&Iby StaffJuly 14, 2026

APCO Holdings Acquires Fidelity Dealer Services

The finance-and-insurance product provider says the addition strengthens EasyCare’s reach across key markets.

Read More →
Ad Loading...
$100 bill and magnifying glass on top of paper that says insurance policy terms and conditions.
F&Iby Lauren LawrenceJune 29, 2026

Tariffs Could Raise Insurance Premiums

As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.

Read More →
Red toy car sitting on top of coins.
F&Iby Lauren LawrenceJune 24, 2026

Smaller Loans, Longer Terms

The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.

Read More →
Two men and a woman on stage in discussion
F&Iby StaffJune 19, 2026

Ensure Your Clients Are Sure About Reinsurance

Industry experts recently broke down the complicated profit center at Agent Summit. Learn what’s relevant and what’s new to share with your dealers.

Read More →
Ad Loading...
Photo of paper money bills, a calculator, notepad and pen
F&Iby Hannah MitchellJune 11, 2026

Car Loans More Plentiful

May access opens up, as risk segments figured largely in the increased availability, Cox Automotive reported.

Read More →
Ad Loading...