Auto loans at lowest rates since 2013: Edmunds
Consumers are also seeing lower gas prices in the COVID-19 outbreak
Auto loan interest rates are at their lowest level in almost seven years.
Interest rates for new vehicles dropped in May to their lowest level since 2013, according to the auto website Edmunds. The annual percentage rate, or APR, on new financed cars averaged 4 percent last month, versus 4.3 percent in April and 6.1 percent a year ago.
This marks the lowest average interest rate since August 2013 and the lowest Edmunds has recorded since 2002.
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“Consumers who purchased a car in May got to take advantage of some of the best deals we've ever seen, thanks to a combination of Memorial Day weekend sales and generous incentives offered by automakers to spur demand during the pandemic,” Jessica Caldwell, Edmunds' executive director of insights, said in a report. “Even with 0 percent finance deals down slightly, more car shoppers got better financing rates than usual.”
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Analysts note that while 0 percent finance offers dropped a bit in May compared to April, they remained at near-record levels. The offers made for 24 percent of all new financed purchases, versus 25.8 percent last month. Additionally, according to the data, 47 percent of all financed purchases received an APR below 3 percent last month, compared to 41.5 percent in April.
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A salesperson holds a mobile device while using video chat to show a potential customer recreational vehicles. (George Frey/Bloomberg via Getty Images)
Loan term lengths also kept near-record highs in May. The average loan term length for a new vehicle was 71.4 months, the second-highest Edmunds has on record. Last month’s average was 73.4 months.
Along with lower interest and finance rates, consumers are seeing lower gas prices. The average price for regular gas is $1.97, versus $2.81 a year ago, according to AAA.