New-Vehicle Purchase Impact Breaks Records
Consumers paying more and more as interest rates stretch costs to new highs.

Over 12% of borrowers went with 36- or 48-month loan terms in the first quarter, the highest since the fourth quarter of 2009.
IMAGE: Pixabay/Rauten-Kauf
The average annual percentage rate for new-car financing has reached a 15-year high, Edmunds says.
The first-quarter average hit 7%, the highest rate since the same quarter in 2008.
One bright spot is that the latest average was flat in March after 14 consecutive months of increases. Edmunds credited that to a small uptick in manufacturer financing subsidies.
The quarter’s average monthly new-car payment, though, hit a record high of $730, up year-over-year from $656, Edmunds said. It noted another record in the percentage of people financing a new car with a monthly payment of at least $1,000: 16.8%. That was up year-over-year from 10.3%.
Meanwhile, the average down payment for new models was also a record for the quarter at $6,956.
Dealers can try to make the best of the situation by tying their marketing to incentives and interest rates, said Edmunds Executive Director of Insights.
“Since interest rates are at the forefront of consumers' minds, any automaker or dealer that can advertise incentives related specifically to interest rates will likely get more attention,” she said in a press release. “This could be a powerful marketing tool that would enable sellers to tap into the significant pent-up demand that has been building over the past few years and convert that demand into actual sales."
The higher rates and monthly payments mean that more vehicle buyers are opting for longer loan terms to make their purchases better fit their budgets, Edmunds said.
“More car shoppers are being pushed to the extreme ends of the finance terms spectrum,” its quarterly report said.
It noted that 12.3% of borrowers went with 36- or 48-month loan terms in the first quarter, the highest since the fourth quarter of 2009, and that most consumers are extending loan terms out as much as possible.
LEARN MORE: Fed Continues Interest Rate Increases
More Dealer Ops

Ladies and Gentlemen, This Is a Dealership: Why the Fundamentals Still Decide Who Wins
A teaching moment by a legendary football coach happens to apply perfectly in the auto retail space. Learn what it is and how to use it to your store’s advantage.
Read More →
Timing the Market Can Hurt Long-Term Program Performance
For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.
Read More →
Dealer Ads and the FTC
The agency has made it clear in recent enforcement actions and warnings, in auto retail and other industries, that advertised prices must include all nonoptional costs to the consumer.
Read More →
Used Autos Supply Dwindles
The March shopping surge, despite high prices, cut into inventory by the most since the thick of the pandemic, Cox Automotive analysts calculated.
Read More →
Managing Risk Effectively Through Changing Times
The variables influencing risk pricing have changed significantly over the past five years. Being proactive and responsive to emerging trends is not optional but essential.
Read More →
Survey Reveals What Won't Fix What's Breaking Car Sales
AutoPayPlus says extra-long auto loans are trapping consumers and threatening the dealer trade-in cycle, and that the industry is leveraging the wrong tools to combat high MSRPs.
Read More →
IA American Appoints Two Execs
Senior vice presidents of the company's agent and dealer channels chosen to support general agents and help auto dealers with sales and performance.
Read More →
Cox Automotive Acquires Inspection Firm
Full ownership of Alliance Inspection Management, or AiM, meant to unlock growth for Manheim inspection capabilities
Read More →
Assurant Expands Partnership With Holman
Extended collaboration delivers training, products and performance development to 30 newly acquired Holman dealerships
Read More →
Franchises, Throughput Down in First Half
A handful of states see franchise growth through June, while EV sales per store boost overall business in U.S.
Read More →