Interest rate surge drives US car loan payments to record high
We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.
Newsroom
Newsroom articles are published by leading news agencies. Hargreaves Lansdown is not responsible for an article's content and its accuracy. We may not share the views of the author.
HL Podcast
HL Insight
US consumers who borrowed money to buy a new car are on the hook for record loan payments, with one in five owing at least $1,000 a month, as surging interest rates combine with costly inventory to make vehicles less affordable.
Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.
Published by
06 Oct 2023
The rising cost of financing is bad news for carmakers, as some customers shun more profitable trucks and sport utility vehicles for cheaper models. It comes as higher interest rates spread through the consumer economy, from mortgages to credit cards to car loans.
The interest rate on loans averaged 7.4 per cent in the third quarter, the highest it has been since 2007, according to car research group Edmunds. The average monthly payment of $736 was a record high, while the share of car buyers paying at least $1,000 a month reached nearly 18 per cent.
New cars, trucks and SUVs are continuing to sell, buoyed by unmet demand from a supply crunch that began in the pandemic, but prices are lofty.
“Affordability has been such a big factor this year,” said Edmunds analyst Jessica Caldwell. “The pent-up demand will
Read more on hl.co.uk
