The average monthly new car payment dropped from $466 per month for cars sold in October 2002 to $447 per month for cars sold in October 2003, according to Edmunds.com (http://www.edmunds.com/).
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“Ironically, this trend does not reflect lower transaction prices or lower loan amounts, both of which rose during the last year,” stated Dr. Jane Liu, Executive Director of Data Analysis for Edmunds.com. “Instead, the lower payments came about because the average financing has stretched from 59.6 months last year to over 62 months this year. Over 38% of last month’s new car buyers took out loans for terms exceeding 60 months, as compared to only 24% of car buyers in October 2002.”
In October 2003, the average car loan amount was $23,801, an increase of 0.9% from last October’s $23,656. And the average finance rate rose from 5.46% in October 2002 to 5.63% in October 2003. So, taking into the increased term lengths this year’s new car buyers will pay an average of $285 more in interest.
New car prices are rising from month to month as well. From September to October 2003 the Edmunds.com New Vehicle Price Index rose a remarkable 1.68% to 99.8% (base = 100 set in January 2002), which corresponds to an annual rate of over 22%.
