A study by the New York Federal Reserve has found that 14% of applicants for auto loans were rejected over the past year — the highest such proportion since the New York Fed began tracking the figure in 2013.
, the highest rate since LendingTree began tracking it in 2019.
Many people were already having trouble affording new vehicles before Wednesday’s quarter-point Fed hike. The average price paid for a new vehicle last month was nearly $48,000 — about 25% above the pre-pandemic average. Used vehicle prices have jumped by even more: The average one now costs nearly $30,000, a stinging 45% above what it was before the pandemic.
“I think people are just not able to qualify for the payments,” says Jessica Caldwell, executive director of insights forThe average monthly auto payment last month, she said, was $736. Over the life of an an average loan — just under six years — a typical borrower is paying nearly $9,000 in interest.
FILE - Shoppers consider a 2022 Cooper convertible on display in a Mini dealership in Highlands Ranch, Colo., on Friday, Feb. 18, 2022. The Federal Reserve’s expected move Wednesday, July 26, 2023, to raise interest rates for the 11th time could once again send ripple effects across the economy. Kelleher said he hopes the Fed stops raising rates after this week, given that vehicle prices, a key component of inflation, have begun to ease.
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