At least $1,000 or more will be the monthly payment of more car buyers in America – as a result of rising auto loan interest rates and high prices.
During the first quarter of 2022, 15.7% of Americans who financed a new vehicle purchase will be facing monthly payments of $1,000 or more, according to a new report from automotive research firm Edmunds.
A year ago is 10.5% and two years ago is 6.7%. As of the latest updated firm Kelly Blue Rock, the new car prices are at a record high, it’s one of the reasons for these high monthly payments.
Buyers will be paying an average of $48,681 for new vehicles in November; which is a $2,250 increase over the past year.
Due to a larger share of Americans wanting to buy expensive luxury vehicles, supply shortages and inflation have lifted car prices, and average costs are also rising.
Expert says the prices of non-luxury cars are dropping for some brands, and buyers aren’t paying as much above MSRP (the suggested price). However, monthly payments rose by even more than car prices in 2022, thanks to auto loan rates, which take off following interest rate hikes from Federal Reserve as the central bank sought to cut down inflation.
- Edmund report that the average down payment was $6,780 for new cars and $3,921 for used vehicles in the fourth quarter of 2022, compared to $5,921 and $3,552, respectively the year before, as a result, the downpayment has also risen to record high.