Auto Loan Rates for the Week Ending July 31, 2009

Car loan rates dropped modestly for the week ending July 31, 2009.  The reduction in bank borrowing cost over the past few months has finally brought about a reduction to the current level of car loan rates.  Bank borrowing costs have dropped measurably as seen with the reduction in fed funds rates, savings rates and CD rates.  Bank car loan rates are now starting to move down along with the corresponding cost of bank funds. 

All car loan rate terms, from 36 month term loans to 60 month term loans, displayed a reduction in interest rates for the week.  New car loan rates, used car loan rates as well as auto refinance rates all exhibited a decrease in interest rates offered. 

The average of the top ten car lenders for new car loans with a 36 month term average moved down to 5.15% for the week.  The average for the 48 month term car loan pushed lower with an interest rate of 5.35%.  The 60 month term car loan rate now averages 5.49% to close the week. 

The average of the top car lenders for a used car loan with a 36 month term averaged 5.64%.  The average for a used car loan with a 48 month term dropped down to 5.82%.  The 60 month term used car loan fell to 5.92% to end the week.

For car loan refinances the loan rates were lower as well with the 36 month auto loan refinance rate falling to 5.48% and the average for the 48 month term refinance car loan rate ending the week at 5.63%.

Auto loan rates should continue to hold these lower rates since the cost of funds to engage in auto finance is not expected to rise in the coming quarter.  In addition, while consumer loan delinquencies have risen substantially during the current recession, auto loan delinquencies have not kept the same worried pace. 

Car loan delinquencies have certainly risen but to the magnitude seen in credit cards and home mortgages.  Banks had increased consumer loan interest rates in 2008 while tightening up on lending standards in order to insure that their auto finance operations remain profitable.  This has helped to restrict any significant increases in loan delinquencies and allowed the banks to now offer lower car loan rates without measurable loan losses.

Tags: auto finance, auto loan, auto loan rates, Car loan, car loan rate, Car Loan Refinances, loan, used car loan

This entry was posted on Thursday, August 6th, 2009 at 1:55 pm and is filed under Auto Industry Update. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.