For those who are shocked by current auto loan rates here is historical rates since 1972

[RichardCranium]

In 1980 the average car was around $7,600 which is around $28,000 in 2023 dollars. The current average car price is $48,000. Cars are more expensive.

You can’t compare averages because statistics can lie. Yeah, the average price of a car in 1980 was cheaper because there were not as many luxury cars or trucks raising the averages. You can still go out and buy a brand new Chevy trax for $21,000 and it would be considered a luxury compact in 1980s terms. Average is not always a good indicator of centrality of data.

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[huunvubu]

In 1980 the average car was around $7,600 which is around $28,000 in 2023 dollars. The current average car price is $48,000. Cars are more expensive.

Interest rates are not correlated to car sale prices. To car loan payments yes to car sale prices no.

Interest rates are set based on the Fed Rates and those rise or fall to either stimulate the economy or to tackle inflation.

 

[Blokcar]

Interest rates are not correlated to car sale prices. To car loan payments yes to car prices no.

Interest rates are set based on the Fed Rates and those rise or fall to either stimulate the economy or to tackle inflation.

I know how interest rates are calculated. No need to explain.

 

[huunvubu]

I know how interest rates are calculated. No need to explain.

Not sure why you quoted my message rather than just post a response.

 

[reneau]

I paid 12% on a house loan taken out in July of 1985. I just smile when I hear the whiney ass x-y-z whatever current generation cry about 5%. Move back into Mommy's basement.

Not bad at all! We were looking at 18 1/2 in 1980 for a new construction. Said no way and bought a mobile home instead. Waited until we had a lot more money saved to build that house.

 

[huunvubu]

Does it matter?

Yes

When you quote a message you are talking directly to the person you quoted. Usually asking for clarification of something in the post.

The quoted person also gets a Bell notification that their message was quoted.

When you just post to the thread you are doing a general post not specific to any one individual.

 

[MakinDoForNow]

I'd like to see a boomer swap lives with someone today in their late 20s that didn't have rich parents and is starting from the bottom, and watch the look on their face after they apply for 200 entry level jobs online with an excellent resume, cover letter, relevant work experience, etc and only get 3 offers from telemarketing agencies that don't offer health insurance and pay them on contract via a 1099 form because 3000+ other people also applied for that job.

So I'm a 1943 model = pre-boomer. I took jobs as found. In high school I put word out that I would clean out and arrange garage for the "fee of what you didn't want to keep" (if there was enough!). Worked into buying entire garage sales and rehoming items to list of persons wanting things. Took contract programming jobs with 1099's. Contractors would "hire" 10-20 for gig and after 90-120 days retain the 15-25% of the best producers. Worked through college and Vietnam then took job next to guy that went to work out of high school and made $50-$100/month LESS than he did with his "experience". Bottom line it's not how much you make but how much you keep. True that things are different now but that happens every 10-20 years. The rules for collecting sales tax on garage sales in some towns such as having to record each item even if $0.25 and paying fines if auditor funds item sold without an entry on sold item is complicating things.

 

[surfstar]

This thread's been awesome. I'm 26 and am facing the housing affordability crisis mentioned above. I work hard, have two degrees in computer engineering and am paid very well for my age as a software engineer, making well north of the average household income in my state. No student debt, no dependents. However, I can't afford the average home.

To all the "old folks", you need to understand that the COST of houses has FAR outpaced inflation, and the historically low rates have covered up the issue until the winter of 2021-2022 when rates shot up.

My parents bought their place in 2009 for ~$425k, and the estimated value is at $850k+ now. That's a doubling in 14 years! Anyone who bought before the pandemic has been able to enjoy the value of their homes skyrocketing and ended up on top. Anyone who missed that train is completely fucked. I can break out some more numbers if you really need it, but it sounds like plenty of people in this thread already have.



The huge problem in my area is that nobody builds the smaller houses you mention. EVERY new construction is some 2500+ square foot behemoth with asking prices STARTING at $800k, and the owners of the smaller homes you mention are HODLing at sub-3% because they don't want to eat a higher rate up-sizing into the $800k homes.

You're a Lariat owner. In your 20s.
This is my second new vehicle at 42. An XL.
Our condo was built in '85, 1,000 sq ft.
Ya gotta make sacrifices and work towards your priorities, and not think that buying a new 2500 sq ft home is normal or required. (or a new truck in your 20s)

 

[BuddyS]

You can’t compare averages because statistics can lie. Yeah, the average price of a car in 1980 was cheaper because there were not as many luxury cars or trucks raising the averages. You can still go out and buy a brand new Chevy trax for $21,000 and it would be considered a luxury compact in 1980s terms. Average is not always a good indicator of centrality of data.

Plus a car bought in 1980 might realistically be reliable for 6-8 years and 100K miles. A car bought today should last 20 years and hit 200K miles. Plus it's tons safer, more efficient and and had loads more features.

 

[boxster03]

I work at CarMax and sell multiple cars a day and can tell you very few people see loans below 8% for a used car these days - many buy cars with interest rates above 20% It amazes me how many customers have car payments that are $750 a month.

 

[BuddyS]

I'd like to see a boomer swap lives with someone today in their late 20s that didn't have rich parents and is starting from the bottom, and watch the look on their face after they apply for 200 entry level jobs online with an excellent resume, cover letter, relevant work experience, etc and only get 3 offers from telemarketing agencies that don't offer health insurance and pay them on contract via a 1099 form because 3000+ other people also applied for that job.

I think about this occasionally -- what if I woke up one day and everything I had was gone. Here's what I'd do:

I'd walk to the nearest store business and ask for a job. Anything -- sweeping floors, stocking shelves, selling shoes, anything. Maybe get two jobs - Home Depot* during the day and wait tables at night. After my first paycheck I'd have at least $500 or so in my hand. I'd go to a public library and use the free internet to get on craigslist and find a room to rent or house to share. So maybe my housing is $1000/mo. at max. I'd eat Ramen and cheap food, and I wouldn't waste anything. I'd find a $20 bike to get around. I'd keep working hard hoping to move up, I'd keep applying for better jobs, I'd stay out of Starbucks and bars. I sure wouldn't worry about dating. I'd buy the little stuff I need at Goodwill stores. And I'd just keep working hard at any job until I made things better. It can be done. In fact, it IS what I -- and millions of others -- did. As long as you have health and time you can do anything. Don't make excuses, make efforts.

*Home Depot offers health care!

 

[bobbill]

Many people got spoiled with the extremely low or even 0% loan rates that were recently offered.

Those rates were unnaturally pushed down because of shocks to the financial system.

Now rates have moved to a more balanced market.

For reference here is a look at the Historical Auto Loan Rates since 1972

Rates in the 1970's were consistently above 10% hitting a peak of 11.57% in November 1974

Rates in the 1980's were consistently above 10% hitting a peak of 17.36% by November 1981

Rates in the 1990's ranged from 11.6% in February 1991 to a low of 7.54% in February 1994. Although they would climb again to reach 9.78% in May 1995, they never crested 10%. For the rest of the decade, auto loan rates hung between 8.31% and 9.44%.

Rates in the 2000's ranged from 9.64% in November 2000 to 6.43% by May 2004

Rates in the 2010's were at their highest in 2011, peaking at 5.89% in August before falling to exceptionally low levels for the first half of the decade. There were moments of slight volatility between 2013 and 2015: Rates sat at 4.13% in May 2013, then rose to 4.5% a year later, immediately sank to 4.06% in November 2014, and then jumped back up to 4.53% by February 2015.

Auto loan rates hit their all-time lowest point in November 2015 at an even 4%. By 2019

2020-2023 Auto loan rates were significantly influenced by the COVID-19 pandemic and the effect it had on the U.S. economy. Rates started off relatively low in 2020 and continued to decline in the first year of the pandemic. Once the world began to recover, auto loan rates skyrocketed, climbing to 6.94% by November 2022. As of February 2023, which is the most recent data collected by the Fed, rates sat at 7.46%.

Historical Auto Loan Rates



Historical Auto Loan Rates: 48-Month Loans

The Fed began tracking auto loan rates for new cars with 48-month loan terms in February 1972. We’ll summarize the FRED findings by decade below.

1972-1979

When the Fed first began tracking this data in February 1972, auto loan rates sat at 10.2%. They hovered consistently around 10% until about May 1973. The 1973-1975 recession saw rates slowly begin to rise as the country dealt with issues like high inflation, high unemployment and a global stock market crash. Rates peaked at 11.57% in November 1974, and it took several years for them to drop below 11% again.

As the U.S. continued to face high inflation following the recession, this led to a sharper increase in auto loan rates toward the end of the 1970s.

1980-1989

The 1980s started with auto loan rates at an all-time high, reaching a record 17.36% by November 1981. The early ‘80s was a period marked by extreme economic contraction, with the country facing another recession in 1981-1982. Monetary policy focused on controlling the inflation left over from the 1970s, and the Fed raised interest rates to combat this sky-high inflation, leading to high auto loan rates.

By November 1982, rates had begun to come down, dropping 1.39 points from the year before to 15.97%. The downward trend continued through much of the ‘80s as rates saw a relatively steady decline, reaching a low of 10.23% in May 1987. Rates would climb back up to 12.44% by May 1989 but would begin to wane almost immediately.

1990-1999

In August 1990, Iraq invaded Kuwait, causing what’s now referred to as the 1990 oil price shock. A sudden rise in oil prices triggered a mild recession in the U.S., which caused loan rates to remain fairly high at the start of the ‘90s.

However, the recession was short-lived. It ended in March 1991, and the U.S. saw a drastic reduction in auto loan rates following its conclusion. They decreased from 11.6% in February 1991 to a low of 7.54% in February 1994. Although they would climb again to reach 9.78% in May 1995, they never crested 10%. For the rest of the decade, auto loan rates hung between 8.31% and 9.44%.

2000-2009

The early 2000s was another period of decline for new car loan rates, decreasing from 9.64% in November 2000 to 6.43% by May 2004. The 2001 New York City terrorist attack played a significant role in this decline, but rates began to steadily rise again starting in 2004.

The increase in rates continued until the Great Recession struck the economy in 2008, causing a sharp, rapid drop in new automobile loan rates. At the beginning of the downturn, rates stood at 7.27% — by May 2009, they had dropped to 6.79%.

2010-2019

As the economy began to recover in 2010, auto loan rates continued to fall, sinking to 5.87% by November of that year. Rates were at their highest in 2011, peaking at 5.89% in August before falling to exceptionally low levels for the first half of the decade. There were moments of slight volatility between 2013 and 2015: Rates sat at 4.13% in May 2013, then rose to 4.5% a year later, immediately sank to 4.06% in November 2014, and then jumped back up to 4.53% by February 2015.

Auto loan rates hit their all-time lowest point in November 2015 at an even 4%. By 2019, they’d climbed up 1.5%, only to begin falling once the COVID-19 pandemic struck in early 2020.

2020-2023

Auto loan rates were significantly influenced by the COVID-19 pandemic and the effect it had on the U.S. economy. Rates started off relatively low in 2020 and continued to decline in the first year of the pandemic. Once the world began to recover, auto loan rates skyrocketed, climbing to 6.94% by November 2022. As of February 2023, which is the most recent data collected by the Fed, rates sat at 7.46%.

Historical Auto Loan Rates: 60-Month Loans

The Fed only started collecting data on 60-month loans for new cars in August 2006, so the available information isn’t nearly as extensive as it is for 48-month loans.

2006-2009

Auto loan rates saw a relatively steady decline from 2006 to 2009, falling from a high of 7.82% in August 2006 to 6.59% in November 2009. The steepest drop occurred between November 2007 and February 2008, when rates fell from 7.6% to 7.18%. During the Great Recession, rates settled around 7% but began falling gradually as the markets recovered.

2010-2019

In the 2010s, 60-month auto loans rates saw a similar pattern to 48-month rates, declining steadily for the first four years to a low of 4.05% in November 2015. Rates stayed relatively consistent over the next year, until they began creeping back up in the following two years. From November 2016 to November 2018, rates climbed more than a percentage point from 4.05% to 5.36%. They remained right around that level through the end of 2019, just before the start of the COVID-19 pandemic.

2020-2023

As the Fed cut interest rates in response to the economic effects of the COVID-19 pandemic, auto loan rates began a steady decline through all of 2020. While there were slight changes throughout 2021 and early 2022, rates for 60-month loans stayed between 4.52% (February 2022) and 5.05% (May 2021). By August 2022, rates had climbed to 5.5% and began to rise significantly, hitting 7.48% by February 2023.

Historical Auto Loan Rates: 72-Month Loans

The Fed’s data for 72-month loans on new cars is the most limited, starting in August 2015.
2015-2019

When the Fed first started collecting data on 72-month loans for new autos in August 2015, rates stood at 4.52%. By May of 2016, they’d declined by 0.44 percentage points, landing at 4.08%. From there, rates began a steady rise for most of the remainder of the decade, topping off at 5.63% in November 2018. From there, they stayed between 5% and 5.5% throughout 2019.

2020-2023

Similar to rates for all other loan terms, 72-month loan rates experienced a drop throughout 2020 and remained low for most of 2021 and early 2022. Rates didn’t rise above 5% again until May 2022, when they reached 5.19%. From there, they increased every few months, reaching 6.97% in February 2023.

How Did the COVID-19 Pandemic Impact Auto Loan Rates?

Based on Federal Reserve data, auto loan rates experienced a decline during 2020 following the start of the COVID-19 pandemic. This is due in part to the fact that the Fed drastically lowered interest rates to help stabilize the economy during that time. Rates remained low throughout 2021 and early 2022 as the country looked to recover from the economic challenges it faced in an ongoing pandemic.

However, as the U.S. dealt with rising inflation, the Federal Reserve began to take steps in 2022 to counteract it. March 2022 marked the beginning of a series of rate hikes in which the Fed raised rates by five percentage points, with the most recent increase occurring in May 2023.

I remember savings rates as high as 20% offered by some Savings & Loan companies back in the 80’s. It’s all relative to the times.

 

[Mav_RICK]

So at the end of the day it's the same old problem... it's finding the right woman.

lol truth

 

[Flomounier1]

I think about this occasionally -- what if I woke up one day and everything I had was gone. Here's what I'd do:

I'd walk to the nearest store business and ask for a job. Anything -- sweeping floors, stocking shelves, selling shoes, anything. Maybe get two jobs - Home Depot* during the day and wait tables at night. After my first paycheck I'd have at least $500 or so in my hand. I'd go to a public library and use the free internet to get on craigslist and find a room to rent or house to share. So maybe my housing is $1000/mo. at max. I'd eat Ramen and cheap food, and I wouldn't waste anything. I'd find a $20 bike to get around. I'd keep working hard hoping to move up, I'd keep applying for better jobs, I'd stay out of Starbucks and bars. I sure wouldn't worry about dating. I'd buy the little stuff I need at Goodwill stores. And I'd just keep working hard at any job until I made things better. It can be done. In fact, it IS what I -- and millions of others -- did. As long as you have health and time you can do anything. Don't make excuses, make efforts.

*Home Depot offers health care!

That MIGHT be sustainable if you are lucky enough to live in a small safe town where nothing is on paper and you get paid cash. But in most cities, you are going to have to provide proof that your income is 3.5 times the rent, provide tax returns, bank statements, do a credit check, pay first and last months rent, security deposit, have references, and likely sign a lease. No landlord wants to risk month-to month with all the squatter nightmares going on and shared rooms are treated as if you're renting an apartment or house nowadays.

And that's assuming the landlord doesn't have a preference on who to rent to like an elderly person living on monthly retirement checks, female only, etc. Young men are treated as a huge liability nowadays.

 

[Mav_RICK]

Interest rates are not correlated to car sale prices. To car loan payments yes to car sale prices no.

Interest rates are set based on the Fed Rates and those rise or fall to either stimulate the economy or to tackle inflation.

Yeah they pretty much do everything they can do to create the inflation and then they tackle it.

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