The average interest rate on a new-vehicle loan in April topped 5 percent, marking the first time since 2010 that the average rate has exceeded 5 percent for two straight months. Rising interest rates could hurt new-vehicle sales, according to Edmunds.
"We know people are buying more expensive vehicles, so obviously [with] a higher interest rate they're going to have to pay more," Jessica Caldwell, Edmunds' senior analyst and director of pricing and industry analysis, told Automotive News. "A lower rate has helped sales grow over the past seven years, so I think that that is going to lend itself to sales slowing a bit."
The average interest rate on a new-vehicle loan in April was 5.02 percent, consistent with the rate in March. The average interest rate will likely dip during the summer months as a result of 0 percent financing offers at the end of the model year, but after that, Caldwell expects rates to rise.