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 17,619.51 23.16 0.13%
Nasdaq 4,986.87 28.40 0.57%
S&P 500 2,063.11 5.47 0.27%
Treasuries 2.34 0.00 0.17%
Data as of 12:48am ET
Company Price Change % Change
Bank of America Corp... 17.02 0.13 0.77%
Apple Inc 125.42 0.90 0.72%
Microsoft Corp 44.15 -0.22 -0.50%
General Electric Co 26.57 -0.07 -0.26%
Pfizer Inc 33.53 -0.06 -0.18%
Data as of Jun 30
Sponsors

Sections

Starting next year, MasterCard will allow you to verify online payments with a facial scan or a fingerprint. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

Three powerful business lobbies push back against President Obama's overtime rule changes that would effectively offer overtime protection to millions of additional workers. More