Car Shoppers Get Temporary Reprieve as Interest Rates Drop to Lowest Level of 2019 in May, According to Edmunds Analysis
Zero percent finance offers made a brief comeback thanks to Memorial Day weekend sales, but analysts caution that these deals will likely dry up through the summer
SANTA MONICA, Calif., June 3, 2019 /PRNewswire/ -- Interest rates for new vehicles dipped to their lowest level of 2019 in May, according to the car shopping experts at Edmunds. The annual percentage rate (APR) on new financed vehicles averaged 6.1% in May, compared to 6.27% in April. Edmunds analysts say this month-over-month dip is in part due to a bump in zero percent finance deals from automakers in May; these deals constituted 5.7% of financed transactions, compared to 3.2% last month.
"Shoppers who made it to the dealership on Memorial Day weekend were lucky enough to snag some of the best deals we've seen all year, but that's really not saying much," said Jeremy Acevedo, Edmunds' manager of industry analysis. "Even with a slight uptick in zero percent finance offers compared to last month, average monthly payments reached record highs and interest rates still hovered above 6%. These conditions are tough on shopper wallets, no matter how you look at it."
Edmunds analysts caution that things aren't going to get much better for car shoppers through the summer due to automakers curbing production to adjust to slumping demand.
"Now that dealers have moved a good number of old cars off their lots, shoppers might not be able to count on later summer sales events for better bargains like they have in the past," said Acevedo. "We're nearing a tipping point: As prices and interest rates continue to rise, we might start seeing shoppers getting priced out of the new market altogether. And if the president's recently proposed auto tariffs actually go into effect, this could be the case for even more consumers."
More insight into recent auto industry trends can be found in the Edmunds Industry Center at https://www.edmunds.com/industry/insights.html.
New-Car Finance Data
May 2019 |
May 2018 |
May 2014 |
|
Term |
69.60 |
68.79 |
66.61 |
Monthly Payment |
$559 |
$532 |
$475 |
Amount Financed |
$32,510 |
$30,945 |
$27,686 |
APR |
6.10 |
5.67 |
4.37 |
Down Payment |
$4,235 |
$3,979 |
$3,445 |
Average |
$36,744 |
$35,616 |
$31,760 |
Used-Car Finance Data
May 2019 |
May 2018 |
May 2014 |
|
Term |
67.35 |
67.00 |
65.02 |
Monthly Payment |
$412 |
$399 |
$374 |
Amount Financed |
$22,191 |
$21,689 |
$20,255 |
APR |
8.67 |
8.22 |
7.49 |
Down Payment |
$2,719 |
$2,627 |
$2,356 |
About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.
CONTACT:
Talia James-Armand
Senior Manager, Public Relations
[email protected]
310-309-4900
http://edmunds.com/about/press
SOURCE Edmunds
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