The average annual percentage rate (APR) on new financed vehicles in the US in Q3 2022 climbed to 5.7% for the first time since Q3 2019, according to Edmunds.

The average amount financed for new vehicles hit a record high in the third quarter, climbing to US$41,347 compared to $40,602 in Q2 2022 and $38,315 in Q3 2021.

Related Company Profiles

View all

The average monthly payment stayed above $700 every month in Q3.

The analysis said 14.3% of consumers who financed a new vehicle purchase in Q3 2022 committed to a monthly payment of $1,000 or more, the highest on record, compared to 12.2% in Q2 2022 and 8.3% in Q3 2021.

Edmunds analysts noted a small uptick in shorter loan terms in Q3, which they said reflected more car shoppers taking advantage of subsidised interest rates offered by automakers. Data showed 9.3% of financed new car purchases had an average loan term of 48 months or less in Q3 2022, compared to 4.5% in Q3 2020 when low interest rates and longer loan terms were a carrot for pandemic weary shoppers.

See Also:

Analysts calculated how much additional interest a consumer could expect to pay on a $40,000 car loan for 72 months at 5% APR versus 36 months at 1.9% APR. They note that jumping from 5% APR at 72 months to 1.9% APR at 36 months would push up the monthly payment by $500 to $1,144 but would save a consumer $5,200 in interest paid overall.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“Most car shoppers tend to have tunnel vision when it comes to their monthly payments and their knee-jerk reaction is to stretch out their loan terms to make pricier purchases a bit more palatable, but that’s a huge risk to take when cars are already selling above MSRP and interest rates are so high,” said Ivan Drury, Edmunds’ director of insights.