May 6, 2022 – Average new auto loan rates have moved up about 70 basis points year to date. Average used auto loan rates have increased about 75 basis points.
Jessica Caldwell, analyst for Edmunds.com, noted, “We can expect a more significant ripple effect on the used side, where more buyers pay market rates that are generally not subsidized. With used car prices already at record highs, the interest rate hike will only make this market more expensive. Some buyers will be forced to sit out entirely or buy an older vehicle to keep payments within an affordable range.”
Used vehicles have already returned to being depreciating assets in 2022, so that is one component of inflation that is already coming down.