Auto loan rates fall to lowest level in nine years

Consumers looking to purchase new cars can do so with the most favorable auto loan rates in nearly a decade, according to new data from Edmunds.com. The auto research site indicates that current loan rates are among the lowest on record, which may lead to greater buying habits in the near future. Interest rates on auto loans fell to 4.16 percent in December, marking the lowest point for such borrowing since Edmunds began tracking rates in 2002. Additionally, the current rate is nearly half of the record high from January 2006, when easier access to credit spurred greater consumer borrowing, Edmunds reports. However, Ivan Drury, an Edmunds analyst, stated that the new rate has the most positive effect on higher-income earners with stronger consumer credit reports. Drury acknowledged they are in a better position to purchase new cars, while their financial stability helped push the overall rate downward. According to Bankrate.com, December's interest rate represented roughly a 0.3 percent drop since December 2009. Meanwhile, 15.4 percent of all auto loans issued in December 2010 came with zero percent interest.