You’ve managed to buy the car, but can you afford to keep paying for it?
Along with soaring car prices, loan rates are the most expensive they’ve been in more than 15 years, with the average monthly payment on a new car at an all-time high, new data from auto website Edmunds shows.
The result of the one-two punch of higher prices and interest rates is that it’s taking Americans much longer to pay off their car loans — which include crossovers, SUVs and pickup trucks — and more buyers are being pushed out of the car market altogether.
“The reality is that you’re getting a narrower, narrower and narrower buying pool that actually can afford to buy new vehicles,” said Jonathan Smoke, the chief economist at Cox Automotive.
The average annual percentage rate (APR) on financing a new car climbed from 4.5% in March 2022 to 7% a year later. Even after falling slightly from February, that’s the highest loan rate since 2008, according to Edmunds data published this month.
Read more at CNN.com
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