Record Auto Payments Driven by High Prices and Interest Rates
- Reports
- 3
- Developments
- 1
- Repetition
- 67%
New informationRepeats or wire copies
What happened
The average monthly payment for a financed new car reached a record $787 in the third quarter, up from $777 in the second quarter. The average new vehicle sold for $50,562 in September, while nationwide auto loan balances climbed to $1.71 trillion in the second quarter. Analysts attribute these record payments to high vehicle prices and stubbornly elevated interest rates, with the average new-car APR holding at 7%.
From fortune.com
Why it matters
The combination of record vehicle prices and high interest rates is significantly increasing the cost of car ownership for consumers. This trend reflects a market where manufacturers have prioritized high-margin vehicles, resulting in elevated consumer prices.
From fortune.com
Who's involved
- Kelley Blue BookProvides vehicle valuation and automotive research used to track market trends.
- Cox AutomotiveIs the parent company that owns Kelley Blue Book.
- cars.comIs a direct competitor to Kelley Blue Book in the automotive information sector.
- ToyotaIs a multinational automotive manufacturer whose sales are influenced by market perception.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- CarMaxSpeculative
Might see increased demand for used retail options as consumers seek affordability due to high new car prices.
- ExperianSpeculative
May face increased financial risk exposure from lenders due to record auto loan balances.
- General MotorsSpeculative
Could see reduced sales volume and lower consumer purchasing power because of high vehicle prices and interest rates.
Possible ripples
Who this could reach next, traced step by step from the reporting. Possibilities worth considering, not forecasts.- Record auto loan balances may increase financial risk for ExperianExperian may face increased complexity in credit risk assessment due to record auto loan balancesPossible
- High car prices and rates may squeeze General Motors salesGeneral Motors may face pressure from high vehicle costs and interest ratesPossible
Keep exploring
The entities involved
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Kelley Blue Book
an Irvine, California-based vehicle valuation and automotive research company
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Jessica Caldwell
researcher
Nothing else this week.