SANTA MONICA, CA — August 1, 2019 — The average interest rate for a new-vehicle loan dropped for the third month in a row in July, hitting its lowest level of 2019. According to the car shopping experts at Edmunds, the annual percentage rate (APR) on new financed vehicles averaged 5.8% in July, compared to 6% in June. Edmunds data reveals that 35% of shoppers who financed their vehicle purchases in July got an interest rate below 4%, compared to 31% of those who financed purchases in June.
“Rising vehicle costs and high interest rates have been placing immense pressure on the new-car market all year, so it’s nice to see shoppers get a bit of a reprieve,” said Jessica Caldwell, Edmunds’ executive director of insights. “Consumers are still in for a bit of sticker shock if they’re coming back to the market for the first time in a few years, but the fact that interest rates are trending slightly lower is helping soften the blow.”
Caldwell noted that one reason average interest rates have dipped is due to automakers and dealers sweetening deals in an effort to clear out lingering 2018 models. Edmunds estimates 3% of new vehicles sold in July were 2018 models, the highest level of outgoing model-year sales of any July in Edmunds’ records, dating back to 2002.