Rising interest rates expected to slow 2019 auto sales

Rising interest rates will be one of the biggest factors influencing how the auto market fares in 2019.
Rising interest rates will be one of the biggest factors influencing how the auto market fares in 2019. | File photo

Edmunds experts noted another slight decrease in new vehicle interest rates last December. 

2018’s last quarter showed an annual percentage rate of 6.2 percent in October, 6.0 percent in November and the lowest rate in December with 5.9.  According to Edmunds, 14 percent of shoppers received rates below a 2 APR compared to 12 percent of shoppers receiving the same rates in November.

"Holiday sales gifted car shoppers with another slight respite from record high-interest rates in December, but in many ways this month was a curtain call for robust finance deals," Jeremy Acevedo, Edmunds' manager of industry analysis, said. "With the holidays behind us and the most recent Fed rate hike kicking into effect, automakers won't be as inclined to move mountains in the new year, so shoppers can expect average APRs above 6 percent to be the new normal."

Experts say finance rates might derail 2019 sales.

"Rising interest rates will be one of the biggest factors influencing how the auto market fares in 2019," Acevedo said. "Access to cheap credit has been a staple of the post-recession auto market and 2018 marked a tipping point for the industry. Interest rates in 2018 closed more than a point higher than they closed 2017, and rates are only going to continue to trend upward, which poses a real threat to shopper demand as we head into 2019."

Visit the Edmunds Industry Center to find more about the latest auto industry trends.

New-Car Finance Data


December 2018
December 2017
December 2013
Term
68.41
68.99
65.18
Monthly Payment
$558
$536
$487
Amount Financed
$32,056
$32,080
$28,032
APR
5.87
4.73
4.05
Down Payment
$4,487
$4,056
$3,941

Used-Car Finance Data


December 2018
December 2017
December 2013
Term
67.22
66.89
64.54
Monthly Payment
$413
$392
$371
Amount Financed
$22,207
$21,613
$19,956
APR
8.66
7.66
7.50
Down Payment
$2,683
$2,488
$2,281
Want to get notified whenever we write about Edmunds ?
Next time we write about Edmunds, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.
Organizations in this story

Edmunds