Auto loan rates made cars an attractive deal
Interest rates for most products were low in 2013, and that was particularly true of auto loan rates for new and used cars.
"Rates in the auto industry didn't show much movement during the year," McBride says. "They did come down even further from what were already record lows."
In addition to the overall low interest rate environment, rates on auto loans stayed low because such loans typically perform better than other forms of credit when it comes to repayment, McBride says.
For much of 2013, the interest rate on a 60-month, new car loan was in the 4 percent to 4.14 percent range while a 36-month loan for a used car fluctuated in the 4.47 percent to 4.64 percent range, according to Bankrate.
But, the low interest rate environment and the quality of auto loan borrowers aren't the only reasons interest rates remained near record lows over the year. According to Melinda Zabritski, senior director of automotive finance at the credit reporting bureau Experian, financing deals offered by car manufacturers and their captive lenders also played a role in the low single-digit rates.
"The very low rates are being held low for economic reasons and also because of incentives," she says.
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