Auto Loan Interest Rates Climb to Highest Point Since 2009, According to New Analysis From Edmunds
Automakers offer fewer zero-percent and low interest rate loans as rate incentives become more costly

SANTA MONICA, CA — April 03, 2018 — Interest rates on new vehicle loans are expected to hit their highest level since 2009 in March, marking the second straight month of sharp rate increases. According to the analysts at Edmunds, the leading car shopping and information platform, the annual percentage rate (APR) on new financed vehicles averaged 5.7 percent in March — compared to an average of 5.2 percent in February and 5 percent in January. This compares to 5 percent in March 2017 and 4.4 percent in March 2013.

Edmunds experts point to a significant decrease in zero-percent loans as a primary driver for this rise in the average. The percentage of zero-percent loans is expected to drop to 7.4 percent in March compared to 11.4 percent in 2017, which Edmunds attributes to larger automakers shifting to different incentive structures to address slowing sales.

"Some of the largest volume brands like Chevrolet, Ford, Nissan and Toyota are demonstrating the largest drop in zero-percent loans year over year," said Jessica Caldwell, executive director of industry analysis at Edmunds. "This goes to show how the cost of lending has become increasingly more pricey, and zero-percent financing, while still a desirable incentive, no longer adds the same wow factor for consumers like it used to."

Edmunds experts also point to a significant decrease in the number of loans in the 2 to 4 percent APR bracket and an increase in the 4 to 7 percent range as contributors to the spike in the average APR in March. The number of 2 to 4 percent loans accounted for 8.9 percent of the market, compared to 14.1 percent a year ago, and the percentage of 4 to 7 percent loans accounted for 34.5 percent of car loans compared to 27.6 percent last March, indicating that buyers are continuing to land in higher brackets than they previously would have.

"The high interest rates right now may catch a lot of car shoppers off guard, especially if they qualified for a lower rate the last time they visited the dealership," Caldwell said.

More insight into recent auto industry trends can be found in the Edmunds Industry Center at

New-Car Finance Data
March 2018 March 2017 March 2013
Term 69.5 69.0 65.7
Monthly Payment  $527  $509  $461
Amount Financed  $31,020  $30,271  $26,533
APR 5.7 5.0 4.4
Down Payment  $3,962  $3,789  $3,584
Used-Car Finance Data
March 2018 March 2017 March 2013
Term 67.2 67.0 63.8
Monthly Payment $393 $382 $361
Amount Financed $21,202 $20,832 $18,867
APR 8.7 8.3 8.4
Down Payment $2,625 $2,507 $2,364


About Edmunds
Edmunds is the leading car information and shopping platform, helping millions of visitors each month find their perfect car. With products such as Edmunds Your Price, Your Lease and Used+, shoppers can buy smarter with instant, upfront prices for cars and trucks currently for sale at more than 13,000 dealer franchises across the U.S. Edmunds' in-house team of unbiased car-shopping experts provide industry-leading vehicle reviews and shopping tips, and the company also has a 20-year-old forums community of car shoppers and enthusiasts, where members can get shopping advice and learn what others are buying and leasing cars for. The company is regarded as one of America's best workplaces by Fortune and Great Place to Work. Edmunds is based in Santa Monica, California, and has a satellite office in downtown Detroit, Michigan.

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