Why are car loans so high?

Is there a reason that car loan rates are so high right now? I read that car loans have gotten more expensive in the last year or so, and I’m not sure why that would be.

Answer
Understanding the driving reasons behind economic change can be challenging. But one of the biggest reasons for the increase in car loan payment costs is the increased demand for large SUVs, pickup trucks, and other expensive vehicles.
Since car loan costs depend on car prices, the average loan payment is now higher because of this increase. That said, even though monthly loan payments are higher on average, overall auto loan rates have actually declined since 2020.
Similarly, the average APR for car loans has also dropped in the last few years—peaking at 4.96% and dropping to 3.87% in 2021. In short, car loan prices are actually lower than they used to be!
But if you’re still worried about the price of car loans, offset the cost by saving on car insurance with Jerry app? A licensed broker, the Jerry app helps users save an average of $879 a year on car insurance. Just download the app, answer a few questions—and Jerry will help you compare quotes from top providers like Allstate and Progressive for free.
Liz Jenson
Answered on Dec 14, 2021
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