SANTA MONICA, Calif. (NewsNation) — If car buyers haven’t felt the heat of inflation yet, they will soon as the average monthly payment for new vehicles reached an all-time high last quarter, according to new data by Edmunds.
The monthly payment for a new vehicle now averages $736 per month. That’s up from the previous all-time high of $733 per month in Q2, the report said.
But not only is it more expensive to buy new vehicles, it’s also more expensive to put a down payment on a used vehicle. The average down payment for used vehicles also reached a record high in Q3 at $4,111, which is up from $4,107, the report said.
Plus, interest rates for buying new and used vehicles have also spiked, reaching points not seen since the Great Recession began in 2007, according to Edmund researchers.
“Spiked interest rates remain the biggest impediment to affordability in both the new and used car markets today. And while the Federal Reserve held off on raising the federal funds rate in their most recent session, the expectation is rates will remain high or even increase slightly through the end of the year,” Jessica Caldwell, Edmunds’ head of insights, said.
Caldwell said while the Fed’s rate hikes might help to ease inflation, all it’s doing is inflating monthly vehicle payments. Plus, the UAW strike could also further elevate vehicle pricing as a result of supply and demand issues, Caldwell explained.
“Zero-percent financing commercials might still be airing to draw shopper attention, but the reality is those deals are all but gone for the average car shopper,” Ivan Drury, Edmunds’ director of insights, said.