(KNSI) – It’s a double whammy for prospective car buyers.
First, during the pandemic, the average price of a vehicle soared to nearly $50,000. Even now, years after a semiconductor chip shortage began to alleviate and full production started back up it still costs about $48,000 for something parked on dealer lots.
Secondly, after a string of Federal Reserve rate hikes, the APR on a new car loan has soared to 8.99% on average, the highest in decades. One out of every six loans currently comes with a payment of over $1,000 per month.
Terms vary dramatically depending on your credit score. Experian says in the first three months of this year a person with superprime credit, over 780, was able to secure a new car loan for 5.18%. A subprime loan averaged 11.53%.
For used car buyers, the rates are even higher, nearly 20% for subprime borrowers.
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