Car Loan Articles

Car Loans Online,Get the Best Car Loan That Is Right For You.Apply Now!

Interest Rates For Car Loans

August 25, 2011

Today's difficult economic environment has a silver lining for people with good credit ratings who are looking to purchase a new or used vehicle. Car loan rates have fallen to new lows, resulting in reduced borrowing costs for car buyers. These interest rates are largely driven by the yields on the intermediate three-year and five-year U.S. Treasury notes. As people flock to the safety of treasuries, these yields have fallen dramatically, resulting in corresponding reductions in car loan rates.

The nationwide average three-year new auto loan rate, as of August 19, 2011, is only 3.87 percent, which is 0.44 percent lower than the prior week. The average rate for three-year used car loans is just 4.79 percent. It is important to note that these low rates are generally only available to those with excellent credit ratings who are in solid financial shape. Lenders continue to be very cautious in their lending to ensure that they are not left holding bad or non-performing loans.

Other financial resources for those looking for the best interest rate on a car purchase are the auto manufacturers themselves. With the current economic uncertainty, car makers are offering powerful incentives to drive sales of vehicles. These incentives include extremely low interest rates, which can be anywhere from zero to 1.9 percent. These incentive loan rates are offered by several auto manufacturers, both foreign and domestic.

Moreover, it appears that this favorable interest rate environment for borrowers will persist for quite some time. The Federal Reserve recently announced their commitment to keep short term interest rates near zero for nearly two years. Furthermore, with the economic uncertainty continuing unabated, investors continually seek the safety of Treasuries, which maintains the downward pressure on consumer car loan rates. Indeed, there has never been a better time for car buyers.

Author: Staff

Related Articles

Get Your Credit Score