Fed: Average Auto APR Springs Back, LTV Drops
WASHINGTON, D.C. — After the average interest rate on new-car loans at auto finance companies dropped significantly to 3.28 percent in July, this measurement bounced back to 5.11 percent in August, according to the latest statistics released by the Federal Reserve Board.
Basically, the average interest rate has returned to the level it was at prior to the unusual July decline. This rate came in at 5.49 percent in June and 5.28 percent for the second quarter.
Continuing on, the Federal Reserve also reported that the loan-to-value ratio has dipped to 88, down from 95 in July and 93 in June. For the second quarter, this figure was 93.
As for the average amount financed, it's dipped back down to $26,920 from $27,582 in July and $24,505 in June. For the second quarter the average amount financed was $25,493, so the latest measurement remains above this.
Looking at term length, the board indicated that this has dropped slightly to 64.6 months in August from 67.2 in July. However, the measurement remains above 63.5 in June.
Additionally, the board found that the average auto loan interest rate at commercial banks came in at 6.95 percent in August. This number was not available for either July or June. However, for the second quarter, it came in at 6.84 percent, down from 7.27 percent in the first quarter and 7.59 percent in the fourth quarter of last year.
In another interest twist, the board indicated, "Consumer credit decreased at an annual rate of 3.75 percent in August. Revolving credit decreased at an annual rate of 0.75 percent, and non-revolving credit decreased at an annual rate of 5.5 percent."