New Study Reveals States With Lowest Auto Loan Rates
- The U.S. states with the lowest average auto loan rates are Michigan, Oregon and Alaska, according to a new study by GoBankingRates.com.
- The study said the states with the highest average rates are Rhode Island, Connecticut and New Jersey.
- GoBankingRates.com found the nationwide average interest rate for a loan on a new vehicle is 3.65 percent.
LOS ANGELES — A new study by GoBankingRates.com says the U.S. states with the lowest average auto loan rates are Michigan, Oregon and Alaska. The states with the highest average rates are Rhode Island, Connecticut and New Jersey.
The study found that the average interest rate nationwide for a loan on a new vehicle is 3.65 percent. In general, states on the West Coast have the lowest overall rates, while the Northeast has the most states with rates of 4.01 percent or higher.
GoBankingRates.com partnered with Informa Research Services to gather online data from more than 4,000 U.S. banks and credit unions. The study looked at the base interest rates for new-car loans as of July 24, 2013, for terms of 36 months, 48 months and 60 months, then averaged the findings from each state to arrive at the rankings.
Michigan, the traditional home of the U.S. auto industry, turned out to have the lowest statewide average: 3.03 percent. The best rates in Michigan were 1.49 percent for 36 months, 1.49 percent for 48 months and 1.75 percent for 60 months.
Oregon and Alaska each averaged 3.04 percent, according to the study. Rounding out the top 10 were New Hampshire, South Carolina, Vermont, Oklahoma, Utah, Washington and North Carolina, with rates ranging from 3.08 percent to 3.31 percent.
The worst rates were found in Rhode Island, which averaged 5.11 percent. Other bottom-10 results included Connecticut, New Jersey, Massachusetts, Louisiana, West Virginia, Delaware, Mississippi, Pennsylvania and the District of Columbia, with rates from 4.82 percent to 3.95 percent.
Although the study makes for interesting reading, rates within each state vary widely, so the compiled averages don't tell consumers the whole story. A car shopper in Rhode Island, the state with the worst average, may find a local financial institution offering a rate equal to or better than the lowest one in Michigan, which had the best average.
As GoBankingRates.com advises, "When it comes to affordable financing, there are always great options available on the local level, and it's up to the borrower to find them."
In a recovering economy it's particularly important to shop around for the best rate. For some time, many automakers have helped keep interest rates low through subsidies and incentives that increased sales. As the economy improves, says GoBankingRates.com, interest rates are on the rise.
But for now, the site notes, "car buyers continue to enjoy some of the lowest financing options available." It just takes diligent comparison shopping to root out the best deals.
Edmunds says: As always, it pays to do your homework before walking into a lender's office or car dealership.