New car loan rates lowest in 9 years

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney) -- There's nothing quite like the smell of a new car, and interest rates are favoring buyers -- well, at least the affluent ones.

A report by Edmunds.com, an auto research site, shows that rates on auto loans are hitting record lows.

The average auto loan for new car purchases carried an interest rate of 4.16% in December -- the lowest level since the automotive research site started tracking data in 2002.

That's almost half the highest rate on record -- which was recorded in January 2006, when demand was high and credit was easier to come by for consumers of all incomes.

December's figures were a unique case, said Ivan Drury, an Edmunds analyst, because the luxury market was the main driver.

"You can only buy a car in December if you're financially well off," he said. Drury explained that holiday presents, travel and other big-ticket costs often keep moderate consumers from the auto dealerships at the end of the year.

Since affluent customers tend to have better credit and get lower interest rates, that skewed the data toward a lower average for the month, Drury said.

Plus, as automakers offered large incentives, many of last month's car buyers paid no interest rates at all.

Buick, a General Motors (GM) brand, offered the most incentives last month. Overall, more than half of the GM brand's financed sales were through no-interest loans.

Toyota (TM) followed close behind, with 40% of its financed sales stemming from no-interest loans, according to Edmunds.com.

Deep incentives likely contributed to strong auto sales at the end of the year. Industrywide, U.S. sales rose 11% in December -- capping the best quarter since the third quarter of 2008, according to sales tracker Autodata. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Find Your Next Car
Index Last Change % Change
Dow 17,067.56 -30.89 -0.18%
Nasdaq 4,598.19 17.92 0.39%
S&P 500 2,002.28 -1.09 -0.05%
Treasuries 2.42 0.08 3.24%
Data as of 5:22pm ET
Company Price Change % Change
Bank of America Corp... 16.27 0.18 1.12%
Apple Inc 103.30 0.80 0.78%
Staples Inc 12.63 0.95 8.13%
Facebook Inc 76.68 1.86 2.49%
Intel Corp 34.57 -0.35 -1.00%
Data as of 4:02pm ET

Sections

Nike flexes its huge dollar advantage by signing Durant to a $300 million endorsement deal that trumps $285 million offer from Under Armour More

If approved by Los Angeles city council, the plan could raise wages for 567,000 workers by 2017. More

The latest celebrity photo hack shows your digital life doesn't end at your phone. If your stuff lives on "the cloud," you don't control the data. More

If approved by Los Angeles city council, the plan could raise wages for 567,000 workers by 2017. More

A scam where fraudsters impersonate IRS agents has now stolen $5 million from taxpayers, and this woman - who lost her entire life savings -- is just one of its victims. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.