‘Unrelenting’ Auto Financing Conditions Squeeze New-Vehicle Buyers in Q3 2024, According to Edmunds Experts

Santa Monica, Calif., Oct. 01, 2024 (GLOBE NEWSWIRE) -- Trends apparent from Q3 auto finance data reveal unrelenting financing conditions for new-vehicle buyers, according to the car shopping experts at Edmunds. New data from Edmunds reveals: 

• Interest rates are sitting at near-record highs: The average new-vehicle APR in Q3 2024 remained elevated at 7.1%, which was the same as in Q2 2024. This marks the sixth consecutive quarter that new-vehicle APRs have hovered above 7%.
• 0% finance deals remain nearly impossible to find (or qualify for): 0% finance deals accounted for just 3% of all new financed vehicle purchases in Q3 2024, which was the same as in Q1 and Q2 2024. Edmunds analysts note that even if buyers were able to find a 0% finance offer, they’d still have to qualify with excellent credit, which is a challenge for many consumers. 
• Consumers continue to sign up for longer loan terms in order to stomach higher prices: 69% of new-vehicle loans had terms over 60 months in Q3 2024, similar to a share of 70% in Q2 and 69% in Q1. Edmunds analysts note that 84-month auto loan terms are on the rise, accounting for 18.1% of new-vehicle loans in Q3 2024, compared to 17.3% in Q2 and 15.8% in Q1. 
• New-vehicle shoppers are taking on $1,000+ monthly payments at near-record levels: The share of consumers taking on loans with new-vehicle monthly payments of $1,000 or more was 17.4% in Q3 2024, marking the sixth consecutive quarter that the share of $1,000+ monthly payments was above 17%. 
• A majority of car shoppers are holding off on purchasing their next vehicle because of high interest rates: Edmunds conducted a survey in August 2024 among car shoppers who have purchased a vehicle previously and have indicated they are planning on purchasing a vehicle in the next 12 months. 62% of the respondents stated that they have held off on buying a new vehicle because of high interest rates.  

“Q3 was unfortunately the same old story as the first half of 2024 in terms of auto financing conditions: Car shoppers found little relief from the elevated interest rates and high prices, which in turn hindered new-vehicle sales growth,” said Jessica Caldwell, Edmunds’ head of insights. “The Fed’s decision to cut rates was a welcome update at the end of the quarter but, on its own, is unlikely to dramatically change the financial landscape for car buyers.” 

Edmunds experts point to the uptick in 84-month auto loans as a potentially troubling sign for consumers down the road. 

“Longer loan terms might make monthly payments more palatable for consumers, but the harsh reality is that most Americans don’t want to keep their vehicle for seven years,” said Ivan Drury, Edmunds’ director of insights. “Simply put, longer loan terms put car owners at greater risk of rolling negative equity into their next auto loan.”

Edmunds analysts suggest car shoppers leverage tools such as the Edmunds Car Loan Interest (APR) Calculator to better evaluate the total amount of interest they’re committing to pay on their next car loan. 

Quarterly New-Car Finance Data
(Averages)

Quarterly Used-Car Finance Data
(Averages)

About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Newsweek, Fortune, Great Place to Work and Built In, Edmunds is based in Santa Monica, California. Follow us on TikTok, Twitter, Facebook and Instagram.

###

Talia James-Armand
Edmunds
310-491-8738
pr@edmunds.com