Interest rates on new vehicles hit an average of 6.26 percent in February, their highest level since 2009, according to a report by Edmunds.
The February average APR of 6.26 percent compares to 5.19 percent a year ago and 4.56 percent four years ago.
Edmunds attributes this in part to automakers reining in zero-percent financing deals and overall low-interest-rate offers. In February, zero-percent finance offers constituted 3.22 percent of all financed deals compared to 8.28 percent last year and 6.95 percent five years ago. Only 18 percent of shoppers received an APR under 3 percent last month, compared to 29.91 percent last year, and 45.49 percent five years ago.
The average transaction price of a new vehicle also remained elevated, hitting $36,331 in February.
“Shopping conditions are pretty unfavorable for consumers across the board, and even those with good credit are having trouble finding compelling finance offers,” says Jeremy Acevedo, manager of industry analysis at Edmunds. “As rising vehicle costs and interest rates continue to compromise affordability, more shoppers might find themselves priced out of the new-vehicle market.”
Although credit conditions continue to tighten, Edmunds notes that shoppers who do finance new-car purchases are refusing to budge on the vehicles that they want. The average amount financed for a new vehicle hit $32,071 in February compared to $31,313 in 2018 and $24,477 five years ago, which Edmunds says reflects sustained shopper preferences for pricier trucks and SUVs.