Zero Percent Finance Deals Drop to Lowest July Level Since 2005, Says Edmunds

Auto loan interest rates sustain near-record highs as automakers make the shift away from traditional summertime financing deals


Santa Monica, CA August 1, 2018 — Zero percent finance deals were slower to materialize for car shoppers in July, according to the experts at Edmunds. Zero percent finance deals accounted for 6.92% of sales in July 2018, compared to 11.34% in July 2017 and 11.18% in July 2013. Edmunds analysts note that this is the lowest share of zero percent finance deals seen in July since 2005.

“Zero percent finance deals typically peak in summer months as a tried-and-true automaker method of spurring outgoing model-year vehicle sales, so this appears to mark the end of a fairly long-lived tradition for the industry,” said Jeremy Acevedo, Edmunds’ manager of industry analysis. “While inventory isn’t at the alarming level it was at this stage last year, how automakers navigate their model-year selldown will be critical through the rest of the year as the market contracts and prices continue to rise.”

Edmunds analysts point to the scarcity of zero percent finance deals as the driving force behind interest rates sustaining near-record average highs in July. The annual percentage rate (APR) on new financed vehicles averaged 5.74% in July 2018 compared to 4.77% in July 2017, representing the largest year-over-year jump that Edmunds experts have seen so far in 2018.

“Interest rates might be down slightly month-over-month, but they’re still hovering near a nine-year high,” said Acevedo. “With more Fed rate hikes ahead, it’s not likely that APRs will be going down anytime soon.”

More insight into recent auto industry trends can be found in the Edmunds Industry Center at www.edmunds.com/industry-center/.

New-Car Finance Data

July 2018 July 2017 July 2013
Term 68.75 69.45 65.58
Monthly Payment $533 $509 $462
Amount Financed $30,903 $30,689 $26,869
APR 5.74 4.77 4.02
Down Payment $3,970 $3,621 $3,356

Used-Car Finance Data

July 2018 July 2017 July 2013
Term 67.00 66.90 64.35
Monthly Payment $398 $383 $365
Amount Financed $21,574 $21,281 $19,373
APR 8.31 7.46 7.81
Down Payment $2,582 $2,468 $2,149

About Edmunds


Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America’s best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.

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