Auto Loan Interest Rates

Even though car sales have gone up recently, auto loan interest rates (along with many other loans) still remain at historic lows. Experts are predicting that there will not be a significant upward movement in rates until the economy has fully recovered. Car manufacturers are likely to welcome this news because the auto market is finally looking up after enduring a slump in recent years. A hike in interest rates would see this sales momentum slowing down and would probably affect the economy. Auto loan rates are not as influenced by federal policies as the interest rates that banks charge to the corporate sector. Interest rates for auto loans are dependent on the lending institution and since there are so many to choose from, it pays to comparison shop.

Auto loans are often tied in with a promotional offer that can give benefits to consumers. Dealers, for instance, may offer incentives such as cash rebates or an extension on warranties. Banks and credit unions may give more flexibility on interest rates and this especially applies if you are already a customer. There are often promotions that offer 0% or near 0% interest rates, although you will need a good credit score to be eligible for these. The sub-prime auto loan market is flourishing and loans to clients with bad credit have been up by about 12%. Getting easier access to loans now makes it possible for more people to buy a car. This is the first time since 2007 that the sub-prime market has increased.

New and used car loan interest rates have remained steady and are expected to stay flat for the near future. The economy has not sufficiently recovered to allow for large fluctuations in interest rates. Experts do not see a reason for this to change and this is a promising sign for further increases in vehicle sales. When interest rates are at a historical low, it is a boon to the consumer and can make purchasing a vehicle many thousands of dollars cheaper than it would otherwise. Add in the incentives being offered by car dealers and the prospect of buying a new vehicle has never looked more attractive.

New and used auto loan interest rates have recently gone down again and the average rate in January 2012 for a 48-month, new auto loan was at 5.16 percent. The average rate for a new auto loan of 60 months fell to 5.22 percent. Used auto loans are also down and the average rate fell to 6.26 percent for a 36-month loan. The average age of vehicles driven in the United States had risen to 10.8 years in 2011. Average car age has risen steadily from the 8.4 years that was reported in 1995. Interest rates during the 1980s were relatively high and in the double digits. Since that time, rates have gone down considerably and they are expected to stay low in the foreseeable future. It may be a good time to consider purchasing a new vehicle. There are many websites such as Moneysupermarket.com that offer low interest rates for car purchases and other financial requirements.