Fed: Interest Rates for Auto Finance Companies Drop to Record Low
By Joe Overby, Staff Writer
May 14, 2009
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WASHINGTON, D.C. — The average interest rate on new-vehicle loans at auto finance companies continues to plummet, as it hit an all-time low for the second straight month, the Federal Reserve recently announced.
At 2.74 percent, this latest interest rate is down from the previous record low of 3.17 percent, which was set in February. In January, the rate was 8.23 percent.
The average maturity on auto loans increased to 61.2 months, after dropping to 59 months in February, which marked the lowest level since 2004.
Moreover, the median amount financed at auto lenders appears to be trending upward, as well. This most recent figure was $27,999, up from $26,268 in February and $22,922 in January.
Moving on, loan-to-value ratio jumped to 89, after remaining at 86 in January and February.
Average data regarding 48-month new-car loans at commercial banks was not available, according to the Fed. However, the average for the first quarter of 2009 (based on preliminary data) was 6.92 percent.
Overall, the Fed indicated: "Consumer credit decreased at an annual rate of 2 percent in the first quarter. Revolving credit decreased at an annual rate of 6.5 percent, and non-revolving credit increased at an annual rate of 1 percent. In March, consumer credit decreased at an annual rate of 5.25 percent."
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