Average New Auto Loan Interest Rate Hits 22-Month Low in December, According to Edmunds
Average interest rate on a new vehicle loan expected to fall for the third month in a row and hit a low point not seen since early 2018 as automakers, dealers extend holiday promotional offers

SANTA MONICA, CA — January 3, 2020 — The car shopping experts at Edmunds say the average interest rate for a new vehicle loan fell for the third month in a row in December, dropping to its lowest point since February 2018. The annual percentage rate (APR) on new financed vehicles averaged 5.4% in December, compared to 5.5% in November and 5.9% in December of 2018. Edmunds data reveals that 22.4% of shoppers who financed their vehicle purchases in December 2019 got an interest rate below 3%, compared to 20.4% of those who financed purchases in December 2018.

"Automakers and dealers gave new car buyers a lot of reasons to feel some holiday cheer in December," said Jessica Caldwell, executive director of insights at Edmunds. "Everyone knows new car deals are usually sweetest at the end of the year, but it's been a long time since financing offers were this good."

Although interest rates took a dip, new vehicle prices are expected to hit near-record highs in December. Edmunds data reveals that the average transaction price for a new vehicle will climb to $38,377 in December, compared to $37,260 last year and $33,773 five years ago.

"The December numbers aren't always indicative of larger market trends because people tend to buy pricey luxury vehicles, trucks and SUVs this time of year. This drives up the average transaction price and lowers the average APR since these shoppers can usually qualify for the lowest promotional rates," said Caldwell. "But the fact that rates have been on a steady decline for the last several months bodes well for more favorable financing conditions in 2020."

More insight into recent auto industry trends can be found in the Edmunds Industry Center at https://www.edmunds.com/industry/insights.html.

New-Car Finance Data

December 2019 December 2018 December 2014
Term 69.0 68.4 66.8
Monthly Payment $577 $558 $499
Amount Financed $33,865 $32,056 $29,162
APR 5.4 5.9 4.4
Down Payment $4,498 $4,487 $3,687
Average Transaction Price $38,377 $37,260 $33,773

Used-Car Finance Data

December 2019 December 2018 December 2014
Term 67.3 67.2 65.2
Monthly Payment $416 $413 $371
Amount Financed $22,660 $22,207 $20,132
APR 8.2 8.7 7.6
Down Payment $2,722 $2,683 $2,278

About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. 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 Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.

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