Edmunds: Auto loan interest rates stay below 6% in August

(September 5, 2019) SANTA MONICA, Calif. — The average interest rate for a new-vehicle loan stayed under 6% for the second month in a row in August, according to the car shopping experts at Edmunds. The annual percentage rate (APR) on new financed vehicles averaged 5.8% in August, compared to 5.8% in July and 6% in June.

Edmunds data reveals that the share of sales with zero percent finance deals saw a slight lift in August, constituting 6.1% of financed purchases in August compared to 5.8% in July.

The average down payment for a new vehicle also dipped in August, dropping under $4,000 for the first time in more than a year.

"Shoppers who made it to the dealership this Labor Day weekend got to take advantage of slightly more generous offers than we've been seeing all year, but this shouldn't be taken as a sign of a dramatic turnaround in the market," said Jessica Caldwell, Edmunds' executive director of industry analysis.

"The model-year sell-down is still in full swing, and automakers and dealers are moving things along just like they should at this time of year."

The summer sell-down season also coincides with hurricane season, and Edmunds analysts are keeping a close eye on how Hurricane Dorian may impact automakers.

"Hurricane Dorian might have delayed some new vehicle purchases, but its overall impact on August sales appears to be fairly nominal," said Caldwell. "We'll be keeping a close eye to see how it may impact numbers in September as its track inches closer to the U.S. mainland."