Average rate for Car loans dip to 8 year low

David Walker, LeaseTrader.com — Thu, 15 Apr 2010 15:33:30 GMT

The average finance rate on a retail car loan sank to 4.4 percent in March, the lowest since 2002, Edmunds.com reported today. The rate was 5.8 percent at the same point last year.

Toyota led in cut-rate financing, as it offered consumers deals to offset the impact of its recall scare. Toyota's average finance rate was 1.9 percent, followed by Mazda at 2.5 percent and Mercury at 3.3 percent. Kia had the highest average interest rate in March at 7.1 percent.

Jessica Caldwell, senior analyst for Edmunds.com, said low rates are not just a good deal for consumers, they're good for automakers, too.

“They are less damaging to brand image and residual values” than steep rebates, Caldwell said.

Edmunds also tracked other notable trends, such as shorter average loan terms by the luxury manufacturers. BMW had the lowest at 52.4 months.

Dodge had the industry's longest average loan term, 67.0 months, followed by Chevrolet at 66.6 months and Hyundai and Kia at 66.1 months.

Source: [ Edmunds , Automotive News ]

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Average rate for Car loans dip to 8 year low