Auto Rate Loans Are at Record Lows

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Bloomberg News - October 1, 2012

Banks, bol­stered by loose mon­e­tary pol­icy, are charg­ing U.S. con­sumers the low­est inter­est rates on new-car loans since the Fed­eral Reserve began sur­vey­ing them in 1971.

What does that trans­late into, when it comes to dealer sales?

Attrac­tive rates helped spur a 9.5 per­cent jump in light-vehicle sales last month and main­tained the fastest pace since the U.S. government’s “cash for clunk­ers” pro­gram three years ago, accord­ing to ana­lysts sur­veyed by Bloomberg.

More than one in 10 auto loans writ­ten in August fea­tured a zero per­cent inter­est rate, the high­est level of the year, accord­ing Edmunds. The aver­age inter­est rate on auto loans fell to 4.1 per­cent in August, the low­est of the year.

“We’re start­ing to see folks with lower credit scores come back and they have a higher ten­dency to take extended loan terms,” J.D. Power’s [Thomas] King said in a tele­phone interview.

Find out what the experts have to say about lower inter­est rates.

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