Analysts say affluent consumers are taking advantage of favorable interest rates to purchase bigger, more feature-heavy vehicles during the pandemic
SANTA MONICA, Calif., Oct. 1, 2020 /PRNewswire/ — Consumers in the market for a new car during the pandemic aren’t shying away from making bigger down payments than usual. According to the car shopping experts at Edmunds, the average down payment for a new vehicle climbed to $4,457 in the third quarter, compared to $3,891 last quarter and $4,045 a year ago. Edmunds data also shows that the average transaction price (ATP) for new vehicles rose significantly in the third quarter. Edmunds estimates that the ATP in Q3 climbed to $39,303, compared to $38,893 last quarter and $37,207 in Q3 of 2019.
Due to increases in average down payments and average transaction prices for new vehicles, Edmunds data shows that average loan terms and monthly payments decreased slightly in the third quarter compared to the second quarter. The average annual percentage rate (APR) for new vehicles saw a small lift, hitting 4.6% in Q3 compared to 4.2% in Q2.
“It’s clear that consumers who are purchasing vehicles right now are feeling quite secure in their financial position despite the pandemic. The discouraging unemployment numbers we’re seeing across the country likely aren’t reflective of the Americans in the new car market,” said Jessica Caldwell, Edmunds’ executive director of insights. “New-car shoppers are putting down more money and taking advantage of continued low interest rates to upsize either to bigger vehicles or vehicles with more amenities.”
Edmunds analysts note that some of