New-Vehicle Purchase Impact Breaks Records
Consumers paying more and more as interest rates stretch costs to new highs.

Over 12% of borrowers went with 36- or 48-month loan terms in the first quarter, the highest since the fourth quarter of 2009.
IMAGE: Pixabay/Rauten-Kauf
The average annual percentage rate for new-car financing has reached a 15-year high, Edmunds says.
The first-quarter average hit 7%, the highest rate since the same quarter in 2008.
One bright spot is that the latest average was flat in March after 14 consecutive months of increases. Edmunds credited that to a small uptick in manufacturer financing subsidies.
The quarter’s average monthly new-car payment, though, hit a record high of $730, up year-over-year from $656, Edmunds said. It noted another record in the percentage of people financing a new car with a monthly payment of at least $1,000: 16.8%. That was up year-over-year from 10.3%.
Meanwhile, the average down payment for new models was also a record for the quarter at $6,956.
Dealers can try to make the best of the situation by tying their marketing to incentives and interest rates, said Edmunds Executive Director of Insights.
“Since interest rates are at the forefront of consumers' minds, any automaker or dealer that can advertise incentives related specifically to interest rates will likely get more attention,” she said in a press release. “This could be a powerful marketing tool that would enable sellers to tap into the significant pent-up demand that has been building over the past few years and convert that demand into actual sales."
The higher rates and monthly payments mean that more vehicle buyers are opting for longer loan terms to make their purchases better fit their budgets, Edmunds said.
“More car shoppers are being pushed to the extreme ends of the finance terms spectrum,” its quarterly report said.
It noted that 12.3% of borrowers went with 36- or 48-month loan terms in the first quarter, the highest since the fourth quarter of 2009, and that most consumers are extending loan terms out as much as possible.
LEARN MORE: Fed Continues Interest Rate Increases
Originally posted on Auto Dealer Today
More Industry

RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Selling to Grow
The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.
Read More →
Recalled Vehicles Hit 5-Year High
Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.
Read More →
Auto Group Acquires Top-Performing Rooftop
Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.
Read More →
China as Pacesetter
Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.
Read More →
BMW Concept Car Makes Fuel to Burn
The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.
Read More →
South Carolina Auto Group Downsizes
Florida-based group Holler-Classic has acquired four rooftops, its first in South Carolina, from Dick Smith Automotive Group.
Read More →