{"id":2719,"date":"2024-09-18T22:30:00","date_gmt":"2024-09-18T22:30:00","guid":{"rendered":"https:\/\/skytoprover.com\/?p=2719"},"modified":"2024-09-19T14:31:59","modified_gmt":"2024-09-19T14:31:59","slug":"feds-first-rate-cut-since-2020-may-lower-car-loan-costs-but-dont-expect-miracles","status":"publish","type":"post","link":"https:\/\/skytoprover.com\/index.php\/2024\/09\/18\/feds-first-rate-cut-since-2020-may-lower-car-loan-costs-but-dont-expect-miracles\/","title":{"rendered":"Fed\u2019s First Rate Cut Since 2020 May Lower Car Loan Costs, But Don\u2019t Expect Miracles"},"content":{"rendered":"<div><img width=\"1024\" height=\"576\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"attachment-large size-large wp-post-image lazyload\" alt=\"\" style=\"margin-bottom: 15px\" loading=\"lazy\" data-src=\"https:\/\/skytoprover.com\/wp-content\/uploads\/2024\/09\/Mazda-Dealer-1024x576-1.jpg\"><\/div>\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-11 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:100%\">\n<ul>\n<li>The Federal Reserve has cut the federal funds rate for the first time in more than four years.<\/li>\n<li>This will lower the cost of borrowing, which will save car buyers money.<\/li>\n<li>Interest rates have been climbing for years and the average new car loan rate is 6.84%.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p>Car buyers are about to get some much-needed relief as the Federal Reserve has announced plans to cut rates by 50 basis points. This will lower the federal funds rate to between 4.75% and 5%.<\/p>\n<div id=\"6a782b01-facb-45f3-a88f-ddf1b1f97657\" class=\"_ap_apex_ad\"><\/div>\n<div id=\"4d84e4c9-9937-4f84-82c0-c94544ee6f2a\" class=\"_ap_apex_ad\"> <\/div>\n<p> var adpushup = window.adpushup  = window.adpushup || {que:[]};<br \/>\n         adpushup.que.push(function() {<br \/>\n             if (adpushup.config.platform !== &#8220;DESKTOP&#8221;){<br \/>\n    adpushup.triggerAd(&#8220;4d84e4c9-9937-4f84-82c0-c94544ee6f2a&#8221;);<br \/>\n             }<br \/>\nelse{<\/p>\n<p>     adpushup.triggerAd(&#8220;6a782b01-facb-45f3-a88f-ddf1b1f97657&#8221;);<br \/>\n}         });<\/p>\n<p>In a statement, the Federal Reserve said indicators suggest \u201ceconomic activity has continued to expand at a solid pace\u201d and progress has been made on inflation, although it remains \u201csomewhat elevated.\u201d Despite that, they conceded job gains have slowed and the unemployment rate has ticked up.<\/p>\n<p><strong>More: <a href=\"https:\/\/www.carscoops.com\/2024\/09\/average-new-car-transaction-prices-drop-to-48k-incentives-on-the-rise\/\">Average New Car Transaction Price Drops To $48k, Incentives On The Rise<\/a><\/strong><\/p>\n<p>Given these developments and an \u201cuncertain\u201d economic outlook, the Fed decided a cut was the best move. <a href=\"https:\/\/www.cnbc.com\/2024\/09\/18\/federal-reserve-cuts-interest-rates-what-will-get-cheaper.html\">CNBC<\/a> notes this is the first since 2020 and one that will benefit consumers in a number of different ways.<\/p>\n<div id=\"taboola-mid-article\"><\/div>\n<p>  window._taboola = window._taboola || [];<br \/>\n  _taboola.push({<br \/>\n    mode: &#8216;thumbnails-a-mid&#8217;,<br \/>\n    container: &#8216;taboola-mid-article&#8217;,<br \/>\n    placement: &#8216;Mid Article&#8217;,<br \/>\n    target_type: &#8216;mix&#8217;<br \/>\n  });<\/p>\n<div id=\"taboola-mid-article-thumbnails-organic\"><\/div>\n<p>  window._taboola = window._taboola || [];<br \/>\n  _taboola.push({<br \/>\n    mode: &#8216;thumbnails-oc-2&#215;1&#8217;,<br \/>\n    container: &#8216;taboola-mid-article-thumbnails-organic&#8217;,<br \/>\n    placement: &#8216;Mid Article Thumbnails Organic&#8217;,<br \/>\n    target_type: &#8216;mix&#8217;<br \/>\n  });<\/p>\n<p>In particular, car loans should become cheaper after skyrocketing in recent years. Experian\u2019s <a href=\"https:\/\/www.experian.com\/content\/dam\/noindex\/na\/us\/automotive\/finance-trends\/2024\/experian-safm-q2-2024.pdf\">State of the Automotive Finance Market report<\/a> revealed the average interest rate for a new car jumped from 4.61% in 2022 to 6.84% in 2024. The increase for used cars was even more dramatic as the average rate went from 8.85% in 2022 to 12.01% in 2024.<\/p>\n<p>Of course, those rates can vary wildly depending on your credit score. While Super Prime <a href=\"https:\/\/www.carscoops.com\/tag\/used-cars\/\">used car<\/a> loans averaged 7.13%, those with Subprime credit forked over an average of 18.86%. For those with Deep Subprime credit, the average rate was 21.55% which is something you\u2019d typically associate with credit cards.<\/p>\n<p>Given numbers like that, any cut is appreciated. However, don\u2019t expect major savings as CNBC quoted Bankrate as saying a 50 basis point interest rate cut would only save new car buyers $8 per month on a $35,000 loan spread out over five years. That equates to $480 over the life of the loan or a little less than $100 per year.<\/p>\n<div id=\"e7c4c913-3924-4b2d-9279-6c00984dd130\" class=\"_ap_apex_ad\"> <\/div>\n<div id=\"5646c171-cb6e-4e2c-8440-49013ca72758\" class=\"_ap_apex_ad\"> <\/div>\n<p> var adpushup = window.adpushup  = window.adpushup || {que:[]};<br \/>\n         adpushup.que.push(function() {<br \/>\n             if (adpushup.config.platform !== &#8220;DESKTOP&#8221;){<br \/>\n    adpushup.triggerAd(&#8220;5646c171-cb6e-4e2c-8440-49013ca72758&#8221;);<br \/>\n             }<br \/>\nelse{<\/p>\n<p>     adpushup.triggerAd(&#8220;e7c4c913-3924-4b2d-9279-6c00984dd130&#8221;);<br \/>\n}         });<\/p>\n<p>        <a href=\"https:\/\/www.carscoops.com\/wp-content\/uploads\/2024\/09\/Federal-Funds-Effective-Rat.jpg\" data-type=\"inarticle-image-block\"> <\/p>\n<figure class=\"wp-block-image size-large\">\n<p>                    <img loading=\"lazy\" class=\"lazy \" src=\"\" alt=\" Fed\u2019s First Rate Cut Since 2020 May Lower Car Loan Costs, But Don\u2019t Expect Miracles\" width=\"1920\" height=\"916\" data-src=\"https:\/\/www.carscoops.com\/wp-content\/uploads\/2024\/09\/Federal-Funds-Effective-Rat-1024x489.jpg\" data-type=\"inarticle-image\" \/><\/p>\n<\/figure>\n<p>        <\/a>  <\/p>\n<h4 class=\"wp-block-heading\">Federal Reserve Bank of St. Louis<\/h4>\n","protected":false},"excerpt":{"rendered":"<p>The Federal Reserve has cut the federal funds rate for the first time in more than four years. This will lower the cost of borrowing, which will save car buyers money. Interest rates have been climbing for years and the average new car loan rate is 6.84%. Car buyers are about to get some much-needed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[15],"tags":[],"_links":{"self":[{"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/posts\/2719"}],"collection":[{"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/comments?post=2719"}],"version-history":[{"count":2,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/posts\/2719\/revisions"}],"predecessor-version":[{"id":2722,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/posts\/2719\/revisions\/2722"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/media\/2721"}],"wp:attachment":[{"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/media?parent=2719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/categories?post=2719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/skytoprover.com\/index.php\/wp-json\/wp\/v2\/tags?post=2719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}