Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions

Auto loan rates at record lows help drive U.S. sales

October 12, 2012
When it comes to car loans, money is cheap. Historically cheap.
Yogesh Mathur discovered that when he was in the market for a minivan for his soon-to-be-born baby. To keep his monthly bill reasonable, the software engineer in Wheeling figured he would have to come up with a large down payment.
Instead, Mathur got money for free: a no-interest, 60-month loan from Toyota to purchase a $27,683 Sienna minivan. Mathur figures the free financing is saving him $1,000 to $3,000.
“It’s great,” Mathur, 32, said in a telephone interview. “I didn’t have to empty out my pockets just before a new baby (arrives).”
Banks, bolstered by loose monetary policy, are charging U.S. consumers the lowest interest rates on new-car loans since the Federal Reserve began surveying them in 1971. Attractive rates helped spur a 9.5 percent jump in light-vehicle sales in September and maintained the fastest pace since the “cash for clunkers” program three years ago, according to analysts surveyed by Bloomberg.
In addition to Toyota, zero-percent financing is being offered on some models from General Motors, Ford, Chrysler Group and Nissan, according to
“There’s no question that the quantitative easing and the pressure on interest rates have helped the industry,” said Paul Ballew, chief economist at Dun & Bradstreet in Short Hills, New Jersey. “It’s absolutely breathtaking to think about not just zero-for-60 programs, but just base interest rates. It’s insane.”