News Coverage
New-vehicle ‘sticker shock’ expected to fuel used market
Monday April 1, 2019
Article Highlights
- If someone purchased a new car in February 2013, on average they put $3,533 down and borrowed $26,700 at 4.36 percent interest. The length of the loan was, on average, 65.79 months.
- In contrast, the average down payment in February 2019 was $4,187; consumers financed on average $32,071 over 69.28 months at 6.26 percent interest. The average monthly payment grew from $462 per month to $556 per month over that same time period.
- "Affordability is leaving more and more people out of the new-car market," said Michelle Krebs, executive analyst at Autotrader.
The Detroit News, April 1, 2019 — Higher new-vehicle prices and rising interest rates this year will drive more buyers to used vehicles or hang on to their old cars longer, industry experts believe.
The average new vehicle sold for more than $36,000 in February, according to industry analysis company Edmunds.com. That’s a 29 percent increase from the $28,000 sale price a decade ago, and far outstripped the 6 percent rise in median household income during roughly that same period.
Meanwhile, the average annual percentage rate for new-car loans climbed to 6.26 percent in February after spending most of the last decade below 5 percent, according to Edmunds. That could hurt both automakers and consumers if borrowing costs continue to rise and make cars even less affordable.