Hyperdrive
Car Loan Rates Head for 14-Year High in New Barrier for Buyers
Customers view a vehicle for sale at a dealership in Richmond, California.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Just as automakers start making headway sorting out the parts shortages that have constrained production and left dealers with a scarce supply of vehicles to sell, the Federal Reserve is putting up a new obstacle: much costlier car loans.
The average annual percentage rate on new-car loans was 6.3% last month, the highest since April 2019, according to Edmunds. The auto-market researcher’s data show APRs closely track the effective federal funds rate, which suggests financing a new vehicle will be costlier in the coming months than it’s been since early 2009.