Navy Federal lowers auto loan rates amid rising costs of ownership

Navy Federal Credit Union lowered auto interest rates as consumers grapple with a total higher cost of vehicle ownership due to maintenance, insurance, fuel and registration costs. The credit union is offering rates as low as 3.89% APR for new cars and 4.79% APR for used vehicles, Kevin Wince , vice president of consumer lending operations, told Auto Finance News . He did not provide further specifics, but a Navy Federal spokesperson told AFN rates were lowered in September 2025. By comparison, the national average interest rate was 6.69% for a new vehicle and 7.33% for a used car as of April 20, according to the latest data from Curinos . Higher fuel and car prices, tariffs, inflation and a spike in insurance premiums tied to costlier repairs have “driven the overall cost of owning a vehicle significantly higher,” Wince said, noting the rate adjustment aimed to support Navy Fed’s members through “economic headwinds.” “There has been a modest improvement in auto loan rates in 2026, but rate reductions alone can't fully offset elevated vehicle prices,” he said. “Borrowing costs remain higher than consumers were accustomed to before 2022, and many households are absorbing that at the same time insurance and repair costs are elevated.” COCO index up 5.5% Navy Fed’s Cost of Car Ownership Index, published April 13, rose 5.5% year over year, 4.5% from Jan. 1, 2025, through March and 47.6% since January 2020 to 147.63, according to data provided to AFN . The index tracks 11 of the most significant expenses tied to owning and maintaining a car, benchmarked to January 2020. Navy Fed last updated the index in November 2025. “The sticker price doesn’t tell the full story." Kevin Wince, Navy Federal Credit Union “The sticker price doesn’t tell the full story,” Wince said. “When you look at the full picture, the total cost of car ownership is up almost 48% since 2020, significantly outpacing wage growth of around 31.5% over that same period.” Affordability challenges have driven consumers to shift to “more affordable used vehicles” and hold onto cars longer, Wince said. “At Navy Federal, the average age of a purchased used vehicle has increased from about 6 years old in 2020 to nearly 7 years old in 2025,” he said, noting that most new-car buyers are in higher income brackets, and many middle-income consumers are “priced out” of feature-heavy new cars . Fuel prices a challenge Higher gas costs amid the Iran war were a large driver of the increase in the latest index, with gas prices up 21.2% month over month in March, according to Navy Fed. In fact, the national average gas price stood at $4.04 per gallon as of April 20, up from $3.91 per gallon a month ago and $3.15 per gallon a year prior, according to the American Automobile Association . Insurance costs higher, stabilizing Insurance costs have stabilized after increasing in late 2023 and early 2024 to reflect higher repair expenses, Wince said. “Added technology, safety systems, connectivity and efficiency features have increased [vehicle] purchase prices, adding value for consumers but also contributing to the higher overall cost of car ownership,” he said. Most large insurance providers have stabilized their rates and are working to be competitive, but have “plateaued at a high level,” Chris Pres , vice president of automotive at dealership-embedded insurance marketplace Polly , told AFN . Some carriers, he noted, have lowered rates to be competitive. Higher insurance costs stretch already squeezed wallets, Wince said, noting that in the past year: Repair costs are up an estimated 6%; Maintenance costs have risen 4.5%; and Registration and licensing fees have increased around 5%. “ Auto sales had a slow start in Q1 2026 , and while spring incentives may bring some buyers off the sidelines, the affordability math is still challenging,” he said. “If tariff-driven parts costs continue to push repair bills higher, and insurance premiums remain elevated, that pressure on consumers' total monthly transportation budget isn't going away anytime soon.” Navy Federal Credit Union was the 14th-largest auto lender by outstandings at yearend 2024 with a portfolio of $32.9 billion, according to the latest Big Wheels Rankings data . Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live .

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Navy Federal lowers auto loan rates amid rising costs of ownership

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