The interest rates on auto loans for new vehicles in the U.S. in March reached their highest level since 2009, according to car shopping and information platform Edmunds.
More buyers are being slotted into the 4% to 7% APR bracket, while Edmunds data also shows a "significant decrease" in the number of loans in the 2% to 4% APR bracket.
The number of 2% to 4% loans accounted for 8.9% of the market in March, compared to 14.1% a year ago.
Meanwhile, the number of 4% to 7% loans accounted for 34.5% of car loans compared to 27.6% last year.
The percentage of zero percent loans declined to 7.4% March, down from 11.4% last year. Edmunds attributes the decline to larger automakers shifting to different incentives to jumpstart flagging sales.
"Some of the largest volume brands like Chevrolet, Ford, Nissan and Toyota are demonstrating the largest drop in zero-percent loans year over year," said Jessica Caldwell, executive director of industry analysis at Edmunds. "This goes to show how the cost of lending has become increasingly more pricey, and zero-percent financing, while still a desirable incentive, no longer adds the same wow factor for consumers like it used to."
As a result, the average monthly payment for a new car rose to $527 per month this March from $509 per month last year. The amount of money financed also increased to $31,020 from $30,271.