Interest rates on auto loans are going up 7%. Meanwhile, paying $1,000 a month is becoming more common, especially for larger trucks. The average cost of a new car doesn’t make sense, and if you’re a fan of your car, you’re probably wondering where all the money goes.
The average APR for new car financing in March was 7%, which helped create a market where the average payment for a new car was $730. That’s bad, but the number of people paying more than $1,000 is going up. In Wyoming, more than 25% of car buyers have high incomes. Sorry, car buyers.
The cost of a new car in the United States has risen again, and at least one Toyota executive thinks it could reach $50,000 later this year. If we pay more for our car, it logically means that our monthly payments increase, especially with higher interest rates. Just in time, Edmunds announced that the average annual percentage rate (APR) for new cars was 7% in March, the highest level since early 2008. The average monthly payment for a new car is now $730, up nearly $80 from a year ago.
Interest rates rise to 7% and above
The average APR is below 6% in two states – Minnesota and South Dakota – and above 7% in 16 larger states. The national average was below 6% in September and has been rising every month since then. The Federal Reserve sets the rate at which banks can borrow money, which affects the rate the rest of us pay when we pay for, say, a car. The Fed raised interest rates recently as it tries to slow inflation and has raised rates by nearly 5% over the past year.
A high APR and high interest rates, as well as the term of the loan, affect the total price and how much money people pay each month. In some cases, there are many. In January, Edmunds reported that about 15% of those who financed a new car did so with a down payment of more than $1,000. By March 2023, that number had risen to nearly 17%, which is a steady increase from the 10.5% who paid four figures a month for their car a year ago. go.
This high payment may be one of the reasons why more Americans will pay off their car loan in 2023 than at any time since 2009, according to Bloomberg. Wyoming has the highest car insurance premiums of $1,000 and up
Two states emerged as “winners” in the race to pay $1,000 or more per month for your car: Texas and Wyoming. Nearly 21% of new car renters are in the four-figure club, but Wyoming has the honor of being at the top of the list. Cars are “more expensive” than before,
according to Cowboy State Daily, we can see that in fact 25.7% of people agreed to pay more than $ 1,000 per month for their car. Edmunds said the higher prices in Wyoming and Texas are “due to the high cost of buying a large truck in both states.”
While payments of $1,000 a month are rare in the used car world, the cost of financing is still higher than for a new car, Edmunds said. The average APR for a well-loved car or truck loan was more than 11% last month, down from more than 9% in September. It’s very expensive there.
