New Car Loan Rates Lowest in Almost a Decade

One thing that made the recent recession such a killer for car manufacturers was that banks were not lending money to people who wanted to buy cars. Now it appears that we have lifted ourselves out of the economic downturn and now new car loan rates are at their lowest in nine years. 

Looking for proof? It is being reported that the interest rate for the average new car loan in December was 4.16 percent. Believe it or not, that is less than half the average of the highest rate on record which was in place in January 2006.

However, analysts say that you need to take another look. The lower interest rate is slanted because it is based on affluent consumers who have better credit and are able to obtain lower interest rates. In December, many auto manufacturers offered incentives to get people to buy their cars that featured no interest rates at all. Buick and Toyota offered such incentives. 

Still, the incentives did help the industry achieve strong sales numbers at the end of last year. Reports are that sales rose 11 percent in December for the auto industry as a whole. The fourth quarter of 2010 was the best quarter in terms of sales since the third quarter of 2008.