New-car shoppers are getting much more than a new set of wheels for themselves these days. They’re also landing the lowest interest rates from banks since the Federal Reserve began measuring them in 1971. These rates played a part in August’s light-vehicle sales jump of 9.5%.
Edmunds.com reported that Toyota , General Motors, Ford, Chrysler and Nissan are offering 0% financing on certain models. In fact, the auto information website also found that more than one in 10 car loans had an interest rate of 0% last month, while the average loan rate fell to 4.1%, the lowest of 2012.
These more-affordable loans were beneficial to subprime car buyers as well, as sales to consumers with a credit score between 650 to 679 rose 26% this year. Prime buyers with scores of 790-999 rose 7%, a report from J.D. Power & Associates found.
J.D. Power also discovered that new-vehicle loans of 60 months or more made up 32% of sales from the beginning of the year through August as more consumers financed vehicles, up to 59% from 53% in 2007. On the leasing side, J.D. Power found those sales rose to 21% from 13% in 2009.
With longer-term loans come smaller payments, and the average payment dropped to $462 from $483 in 2007. The average car price, however, rose to $32,384 from $30,880 in the same time period. The average lease payment fell to $419 from $479 five years ago.