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Auto loan interest rates are rising. For most of us, when buying a new or used car, agreeing on a price is only half the work (or if you have a car to sell/trade-in, a third of the work). Are you ready to go to battle for round two? That would be negotiating a fair auto loan interest rate.
Auto loan APRs are higher than they’ve been at any point in the past decade, and they’re headed even higher. How much do rising interest rates matter for today’s new and used car buyers? We crunched the numbers to find out.
The Average Car Loan Interest Rate Is the Highest Since 2009
What do you get when you combine interest rate hikes with the likelihood of an economic recession? It becomes a whole lot more expensive to borrow money. Whether you’re in the market for a new car or a new house, lenders seem to be increasing loan rates every other day in 2022.
According to new data from Edmunds, the average car loan interest rate (APR) on a new vehicle loan rose to 5.9% in September. That’s up 44% since December 2021. The last time auto loan rates were this high was right before the crash of 2009-2010.
What’s different this time around? Cars are 71% more expensive in 2022. Back in 2009, the average new car transaction price was $28,201. Today, it’s a bit over $48,000. Buyers are paying A LOT more interest in 2022, and monthly car payments are more akin to second mortgages.
In September 2022, the average amount that new car buyers financed was $41,347. Thinking about stretching that loan term as far out as possible? That adds up to a total of $7,849 in interest paid over 72 months. Ouch!
Used Car Loan Rates Rising Most
The average used car loan interest rate has shot up to 9.2%, adding thousands to the total cost of borrowing money to buy a car.
In September 2022, the average amount that used car buyers financed was $31,366. That adds up to a total of $9,566 in interest paid over a 72-month loan term.
What if you shop around and get pre-approved for a 7.0% APR instead of the average of 9.2%? Over 72 months, you’d SAVE a grand total of $2,429 in interest, all by simply shopping around and getting some more loan rate offers.
When ‘The Fed’ meets again in early November, they’re almost certain to announce another rate hike. Whether it amounts to 75 basis points or less is of little concern. What’s certain is that auto loan rates will continue to rise in November.
Based on our own analysis at CarEdge, we expect the average car loan interest rate to climb higher to between 6.5% (for new cars) and 10.5% (for used cars) in November.
Remember that these are expected averages, so there will be better (and worse) auto loan offers out there. Don’t settle for your first auto loan rate offer. Shop around!
How to Save Money on Auto Loan Interest, Even As Rates Rise
There are still ways to save big-time on auto loan interest. These are the biggest ways to keep more money in your pocket:
Shop around for the lowest interest rate. Pre-approval does impact your credit score, so it’s best to apply for all of your pre-approvals at the same time (or same week at least) right before you plan to buy the car.
Go for a shorter loan term! At today’s average new car loan interest rate of 5.9%, the difference between financing $35,000 with a 48-month loan and a 72-month loan is $2,267 in interest paid. That’s not pocket change!
Spend less, and/or put more down. It’s easier said than done, but consider borrowing less if you want to pay as little interest as possible. You could buy a less expensive car, put more money down for your down payment, or both.
Refinance your loan. Yes, even as interest rates are rising, if you get stuck with a bad loan, or improve your credit over time, you should consider refinancing your auto loan. Go to a local credit union so that you don’t get hit with fees from online websites.
Save Time and Money with Real Advice From Auto Experts
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Compare and choose multiple offers in minutes:
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Interest rates are rising, and inflation is at record highs, but deals can still be had when buying a new car. Every month, the team at CarEdge pores over the latest offers from every automaker. The result is a one-stop resource to share the very best new car deals with you.
Not finding what you’re looking for? We’ve included links to each automaker’s website. Check back frequently, as this living page will be updated regularly.
Check out these other CarEdge car buying resources:
Hyundai lease offers this month are good, but the amount due at signing has increased this month.
Hyundai Venue: $151 per month with $3,281 due Hyundai Elantra: $219 per month with $3,299 due Hyundai Kona: $209 per month with $3,999 due Hyundai Tucson: $279 per month with $3,999 due Hyundai Santa Fe: $269 per month with $3,999 due
Nissan Altima: $199 per month for 18 months with $2,309 due Nissan Leaf: $269 per month for 36 months with $5,259 due Nissan Rogue (AWD): $299 per month for 36 months with $3,459 due Nissan Murano (FWD): $299/month for 24 months with $2,099 due
With interest rates rising and inflation putting pressure on automakers and their dealer networks, the only thing that could bring better new car deals would be plummeting demand. We’ve seen signs of weakening demand and higher new car inventory, but nothing considered drastic. Expect auto loan interest rates to climb in 2023. The best car deals in February won’t last.
Buying a Car Soon? Check Out These Other Resources
Rates are changing, but deals can still be had when financing a new car. Interest rates remain high in 2024, yet smart buyers secure zero percent financing each and every day. If you’re thinking of financing a new car, you’ll want to take advantage of manufacturer incentives to save thousands. These are the best new car finance deals in October 2024.
We’ve compiled every manufacturer’s financing incentives below, but these are the best loan deals with the lowest auto loan rates this month. Automakers update their incentives between the second and fifth business day of each month. Check back for updates! As you can see, zero percent financing is on the rise in a big way…
Zero Percent FinancingIn October: Chevrolet Silverado 1500; Dodge Hornet; Most Jeep models; GMC Sierra 1500; Mazda CX-50, CX-30, CX-5, Mazda3; Kia Sportage, Sortento, EV9, EV6, Niro EV; Nissan Titan, Pathfinder, Rogue; Subaru Solterra; Volkswagen Tiguan, ID.4
Kia is having a hard time selling EVs now that the EV6 and Niro EV have lost the federal tax credit. Now, the EV9 is made in America, bringing eligibility to the model. But make no mistake: EVs are where the best Kia APR deals are this month:
0% APR for 72 months: 2024 Kia EV6, 2024 Kia EV9
0% APR for 60 months: 2024 Kia Niro EV
0% APR for 48 months: 2024 Sportage, 2024 Sorento
3.9-4.9% APR on most other Kia models for well-qualified buyers
Ready to outsmart the dealerships? Download your 100% freecar buying cheat sheets today. From negotiating a deal to leasing a car the smart way, it’s all available for instant download. Get your cheat sheets today!
Can you negotiate new car prices in 2023? Our CarEdge Auto Experts help hundreds of car buyers every week, and they gather real-time insights of the market along the way. The market is changing, and both new and used cars are more negotiable than at any time in 2022. Which car brands are most negotiable right now? We spoke to CarEdge’s Justise Lasley and Mario Rodriquez to find out. The consensus was clear: these are the five car brands that you can negotiate right now.
You Have MORE Negotiating Power With These 5 Brands Today
Car buying has always been about supply and demand. However these days, automakers are admitting to intentionally holding supply down to keep prices higher. Still, some brands are negotiable. As car prices fall, gone are the days of being forced to accept dealer markups. You CAN buy a new car at or below MSRP.
Would a car buying coach make this whole process easier for you? What about major savings on financing, insurance, maintenance and more? Consider joining CarEdge+, the membership that pays for itself!
Now onto the 5 brands you can negotiate today…
Jeep
CarEdge’s Mario Rodriguez says that the Stellantis family of brands (Chryler, Jeep, Dodge and Ram) is negotiable right now. A quick look at CarEdge Car Search shows that prices for both new and used Jeeps are softening, with many dealers slashing prices. We’re seeing more Jeeps sit on the lot for longer, such as this discounted Cherokee in the DC-area.
Jeep Incentives:
Lease a Jeep Compass for $347/month with $3,799 due at signing
The Cherokee qualifies for a $1,750 cash allowance
The much-loved Wrangler 4xe plug-in hybrid can be leased for just $519/month with $4,899 due at signing
Purchase a Jeep Gladiator with 0% APR for 72 months
After 18 months of elevated prices, some trucks are finally more negotiable. The Ram 1500 is more negotiable in 2023 due to softening demand and slightly better inventory. Finally, Ram trucks are coming down in price. This 2020 Ram 1500 Laramie is one of many examples. This East Coast dealer dropped the price by 12% recently. Depending on how long the truck has been on the lot, in many cases you can start negotiating truck prices.
Ram Incentives:
Purchase a Ram 1500 or 1500 Classic with 0% APR for 72 months
How can you get a low APR for your new set of wheels? Finance with CarEdge! We work with trusted credit unions offering low rates and great customer service. Learn more about our hassle-free process.
Chrysler
CarEdge’s Justise Lasley has been seeing more Chrysler deals over the past month. The Pacifica and Pacifica Hybrid were previously in such high demand that finding one was next to impossible. Now, demand has weakened, and Chrysler is even offering manufacturer incentives. On the used van front, the Pacifica is finally seeing softening prices. This 2021 Pacifica Limited 4WD has had a $4,000 price drop recently.
Chrysler Incentives:
$1,000 in Stellantis Loyalty Retail Bonus Cash towards a Pacifica Touring L
$750 cash allowance on a 2022 Pacifica Hybrid Touring L
Lexus is one of the brands that releases monthly inventory numbers. In September, Lexus had a 26 day supply overall, with a higher inventory among Lexus cars than SUVs/crossovers. The overall luxury segment has seen the quickest depreciation over the past month. This is especially true for used Lexus models, such as this 2020 NX. See the latest used car price trends here.
CarEdge’s Mario Rodriguez noted that the Lexus RX350 is the most negotiable right now considering inventory numbers and incentives.
Lexus Incentives:
The RX is available with 2.99% APR for 48 months in select regions
$1,500 lease cash is available for the RX
The ES is available with 2.99% APR for 48 months in select regions
More buyers are in the market for luxury vehicles, but demand has backed off of recent highs. BMW models are more negotiable as dealers face the prospect of further market softening. They want to sell their lot inventory ASAP. For example, a DC-area BMW dealership has slashed 10% off the price of this 2020 BMW X3 over the past month.
Our own auto expert Mario says that the X5 and X3 are the most negotiable models right now.
BMW Incentives:
Lease the BMW X3 for $579/month with $6,469 due at signing
Lease the 330i starting at $579/month with $4,779 due at signing
Don’t Go In Blind: Negotiate Car Prices With Confidence
Whether you’re thinking of buying new or used, always know the right price to pay. This is more important than ever as the market continues to change at a quicker pace. At CarEdge, we know that the best deal is the one you completely understand. Research is key to negotiating car prices effectively, and ultimately buying your car for the price you want.
The CarEdge Community is your one-stop shop for car buying advice and consumer empowerment. Join for free, or become a Premium member for unlimited access to CarEdge car buying tools, our team of Auto Experts, deal/lease reviews, and more.
Whether you’re in the market for a new or used car, you have more negotiating power in 2023 than at any time in the past two years. Our car buying coaches help hundreds of car buyers every week, and they gather real-time insights of the market along the way. The market is changing, and both new and used cars are more negotiable. Which car brands are most negotiable right now? We spoke to YAA’s Justise Lasley and Mario Rodriquez to find out. The consensus was clear: you can negotiate new and used car prices today, especially with these brands and models.
Negotiate With Confidence
Car buying has always been about supply and demand. These days, automakers are admitting to intentionally holding supply down to keep prices higher. Still, many cars and trucks are negotiable for the first time since 2020. As car prices fall, gone are the days of being forced to accept dealer markups. You CAN negotiate car prices in 2023.
Let’s talk about how you can save thousands on your next auto.
Crossovers and SUVs Are Negotiable
During the post-pandemic shortages, both mainstream and luxury crossovers and SUVs saw prices climb very quickly. Now, as the auto market continues to cool off, they have farther to fall. YAA Auto Expert Mario says that he’s been helping YAA members negotiate great deals on several crossovers, such as the following models:
Mazda CX-9
Honda Pilot
Subaru Ascent
Subaru Outback
Jeep crossovers
Volvo crossovers (XC40, XC60, XC90)
Audi crossovers (Q3, Q5, Q8)
BMW crossovers (X3 and X5)
In addition to the thousands of dollars our team of advocates has been saving for our members, even more car buyers have been sharing similar stories on our Community Forum. Deals are even possible for popular models like the Toyota RAV4 and Lexus RX.
Negotiate Truck Prices in 2023
Ram prices are negotiable in early 2023 after a year of markups.
It’s almost shocking how quickly truck prices have fallen, at least when it come to negotiated out-the-door prices.
“Better truck inventory levels have also increased the negotiability of models like the Toyota Tacoma, the RAM 1500, Chevy Silverado, Honda Ridgeline, and Nissan Titan. Buyers are negotiating thousands off of trucks that were selling with markups just months ago,” one of our Auto Experts noted.
Jerry, an industry veteran and YAA Expert, has been surprised to see better deals and more negotiable truck prices for certain mainstream Ford F-150 models. Of course, the new electric F-150 Lightning remains in high demand with low supply, so simply finding one at MSRP would be a big win for the Lightning. See every electric truck’s pricing and range here.
A quick look at YAA Car Search shows that prices for both new and used trucks are softening, with many dealers slashing prices. We’re seeing more trucks sit on the lot for longer, such as this Ram 1500 in Texas. When the dealer adjusts the price that often, you know negotiation is on the table!
Knowledge Is Power In 2023: Negotiate Car Prices With Confidence
Whether you’re thinking of buying new or used, always know the right price to pay. This is more important than ever as the market continues to change at a quicker pace. At YAA, we know that the best deal is the one you completely understand. Research is key to negotiating car prices effectively, and ultimately buying your car for the price you want.
We have hundreds of free guides, online tools and helpful videos to help you get the best deal on your next vehicle. For example, here are a few of our member favorites. Feel free to take them with you to the dealership!
The YAA Community is your one-stop shop for car buying advice and consumer empowerment. Join for free, or become a Premium member for unlimited access to YAA car buying tools, our team of Auto Experts, deal/lease reviews, and more.
