Affordability of New and Used Vehicles Falls
Interest rates increasing the costs, with no end in sight, Edmunds finds.

Several record highs were set in the third quarter, including the average used-vehicle down payment of $4,111.
IMAGE: Pexels/Raten Kauf
In the third quarter, vehicle borrowing costs reached highs last seen during the Great Recession, while average monthly payments hit records, according to Edmunds findings.
The average annual percentage rate for new vehicles rose three percentage points quarter-over-quarter to 7.4% as the used-vehicle average APR increased two points to 11.2%.
"Spiked interest rates remain the biggest impediment to affordability in both the new and used car markets today,” said Edmunds Head of Insights Jessica Caldwell.
Meanwhile, the percentage of borrowers with monthly payments for a new vehicle of at least $1,000 reached a record high of 18%, surpassing the previous record of 17% in the second quarter. The average monthly payment also broke a record at $736.
The average down payment on a used vehicle set a record, too, at $4,111, Edmunds said.
The end of the vehicle affordability quandary may not be in sight, Caldwell said, citing potential additional interest rate increases and the United Auto Workers strike in Detroit. The strike, she pointed out, could "wipe out any inroads made on inventory and the return of incentives, further elevating pricing,” at least for the big three automakers based there.
Zero-percent financing, though still being advertised in places to “draw shopper attention,” has all but disappeared, Edmunds pointed out, representing just 1% of third-quarter transactions after peaking in the second quarter of last year at 24%.
LEARN MORE: Dollar Streched Thin on Used Models
More Fixed Ops

ASE Acquires WrenchWay
The auto technician certification nonprofit said the deal expands its role in workforce-development and support for current and future service professionals.
Read More →
TraXtion Introduces TireSpec Website Solution
The company says the offering enables consumers to snap a photo of their tire with a smartphone and receive an instant replacement quote, capturing 90% of tire shoppers who start their shopping online.
Read More →
UVeye Launches Same-Day Vehicle Listings for Car Dealers
New 'Scan to Sold' offering turns the service lane into a website-ready merchandising photo booth designed to help dealerships reduce turnaround time from days to minutes.
Read More →
RockED, VINCUE Launch Inventory-Management Industry Certification
Offering for retail automotive dealers and operators is designed to address what the companies say is a lack of standardized and modern thought leadership in vehicle life-cycle management.
Read More →
Survey Shows What Technicians Want
Data gathered by the ASE Training Managers Council shows that service technicians prefer classroom or instructor-led training and hands-on lab work over online or self-led training.
Read More →
Automotive Service Pros Month Shifts to October
ASE is making the change to better align with two other sector observances that take place each year highlighting technicians' key role.
Read More →
Extreme Temps Hinder EV Efficiency
American consumers might be happy to know that their preferred hybrids are slightly less impacted by extreme temperatures than fully electric vehicles, according to a new study.
Read More →
Ban on Air Bag Inflators by Chinese Maker Proposed
NHTSA blames 10 deaths and two serious injuries on what its investigators believe were illegally imported air bag inflators. It’s taking public comments before deciding whether to ban them outright.
Read More →
Fix It Forward Program Helps Man Regain Mobility
Albuquerque consumer who suffered a life-changing injury regains the use of his vehicle after Fiesta Volkswagen's service team shared his story with DOWC Cares.
Read More →
ASE Connects Partners With Worldpac to Build Technician Numbers
The collaboration is intended to help auto dealerships, automakers and after-market shops further develop the technician pipeline.
Read More →