Edmunds determined average interest rates for both used-vehicle and new-vehicle financing dipped to their lowest levels of 2019 in May.

Fueled in part by captives increasing the availability of zero percent financing, Edmunds found the annual percentage rate (APR) on new financed vehicles averaged 6.1% in May, compared to 6.27% in April. Edmunds previously indicated the year-high came in March at 6.36%. In February, the average APR on new financing stood at 6.26% after opening month the year registered at 6.19%.

Analysts said this latest month-over-month dip is in part due to a bump in zero percent finance deals from automakers in May. These deals constituted 5.7% of financed transactions, compared to 3.2% in April.  

“Shoppers who made it to the dealership on Memorial Day weekend were lucky enough to snag some of the best deals we’ve seen all year, but that’s really not saying much,” said Jeremy Acevedo, Edmunds’ manager of industry analysis.

“Even with a slight uptick in zero percent finance offers compared to last month, average monthly payments reached record highs and interest rates still hovered above 6%. These conditions are tough on shopper wallets, no matter how you look at it,” Acevedo continued in a news release.

On the used-vehicle financing side, Edmunds noticed the average rate softened to 8.67% in May from 8.83%. Like for new models, average used-car APR also hit the year-high in March at 9.50%. In February, analysts pegged the used average at 8.95%, up from 8.88% in January.

Especially in the new-vehicle market, Edmunds analysts caution that things aren’t going to get much better for vehicle shoppers through the summer due to automakers curbing production to adjust to slumping demand.

“Now that dealers have moved a good number of old cars off their lots, shoppers might not be able to count on later summer sales events for better bargains like they have in the past,” Acevedo said.

“We’re nearing a tipping point: As prices and interest rates continue to rise, we might start seeing shoppers getting priced out of the new market altogether. And if the president’s recently proposed auto tariffs actually go into effect, this could be the case for even more consumers,” Acevedo continued.

Acevedo’s colleague at Edmunds, Jessica Caldwell, was among the industry observers reacting to President Trump’s potential actions against Mexico in this previous report published by Auto Remarketing.

New-Car Finance Data

Used-Car Finance Data

Source: Edmunds