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1. Average new and used car loan rates hold steady in April
Top line: New data from Edmunds shows car loan rates have stalled to similar levels seen in March.
Why it matters: Stubbornly elevated loan rates coupled with high average vehicle prices and inflation continue to squeeze consumer budgets. Some car buyers are trying to find relief by choosing shorter loan terms to bring down the overall cost of the vehicle, even if it means higher payments.
By the numbers:
Typical new car interest rates steadily increased each month from January to March but remained unchanged in April.
Average new car loan rates ended April at 7.2%, below the high of 7.6% in October 2023.
Used car loan rates fell 0.3% from March to April, and are now at 11.6%.
In April, New Mexico had the highest new car rate at 8.52%. Nevada, Alaska, Mississippi, and Georgia also exceeded 8% APR.
Mississippi had the highest used car rate at 14.33%, followed closely by Alabama (13.36%), Georgia (13.19%), and Louisiana (13.28%).
Texas, Montana, North Dakota, and Wyoming have 25% or more of consumers carrying a $1,000 monthly auto payment. The average used car loan rate in these states is over 12%.
What’s more: Borrowers who financed vehicles in 2022 or early 2023 are at a higher risk of negative equity. Basically — negative equity occurs when you owe more on your car loan than the car is actually worth.
The average negative equity for trade-ins reached $6,064 in Q4 2023.
Car buyers who bought during the pandemic are now stuck with lower-than-expected trade-in values, further squeezing their buying power.
What we’re watching: Fighting inflation is proving trickier than expected for the Federal Reserve. While they raised interest rates to a multi-decade high in 2023, progress on lowering inflation stalled in 2024. This has left the Fed unsure about when or if rates will come down this year.
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2. Kia/Hyundai top 2023 auto thefts
What's happening: Hyundai and Kia models are now the most stolen vehicles in the country, according to a new report from the National Insurance Crime Bureau (NICB). These cars have dethroned full-size pickup trucks, which have dominated the top 10 most stolen vehicles list for years.
By the numbers:
Hyundais and Kias claimed 6 out of the top 10 spots, with the Hyundai Elantra topping the list as the most stolen car in the country with 48,445 thefts in 2023.
Here's a further breakdown of the top 10:
Hyundai Elantra (48,445 thefts)
Hyundai Sonata (42,813)
Kia Optima (30,204)
Chevrolet Silverado 1500 (23,721)
Kia Soul (21,001)
Honda Accord (20,895)
Honda Civic (19,858)
Kia Forte (16,209)
Ford F150 Series Pickup (15,852)
Kia Sportage (15,749)
The reason? The rise in Hyundai and Kia thefts likely stems from a now-fading social media trend, the "Kia Boyz" challenge, which showed TikTok users how to steal these vehicles with just a USB drive.
Why it matters: Despite Hyundai’s anti-theft campaign, the ease of stealing older Hyundais and Kias will likely continue to plague owners and auto insurers for some time.
The bottom line: 2023 saw another record year for car thefts, with over 1 million vehicles stolen nationwide. While the trend might be slowing down, Kia and Hyundai owners might want to consider stronger security measures.
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3. Toyota: A top pick for slow depreciation
Big picture: A CDG analysis of Black Book data suggests Toyota vehicles are experiencing relatively low depreciation compared to the broader market.
Vocab time: Vehicle depreciation refers to the rate at which a vehicle loses its value over time. Depreciation rates can vary based on factors such as the make and model of the vehicle, market conditions, and individual ownership.
Why it matters: How much value a vehicle is predicted to retain can play a big role in consumer decision-making during the car buying process.
State of play: As of mid-May 2024, The Manheim Used Vehicle Value Index, which tracks changes in used vehicle prices, stood at approximately 199.1, down 20% from its peak of 250 in January 2022.
What it means: Think of the Manheim Index as a used car price meter. It was way up in early 2022, meaning used cars were more expensive and depreciating very slowly. Now, the meter is moving down, suggesting used car prices are on a downward trend and depreciation might be picking up a bit.
How does Toyota stack up?
An analysis of three of the best-selling Toyota models from 2023 (RAV4, Corolla, Highlander) reveals their depreciation performance compared to their respective vehicle segments.
The RAV4, a popular small crossover SUV, experienced only 7.8% depreciation from October 2023 to April 2024. This outperforms the average depreciation of 11% seen in the small crossover/SUV segment.
The Corolla, a compact car, saw a 15% decline in value — lower than the 20% average depreciation observed in the small car segment.
The Highlander, a mid-size SUV, maintained its value well with a depreciation rate of 11%. This compares to the 14% depreciation average for large crossover/SUVs.
2023 Toyota RAV4
The bottom line: In a market full of uncertainty, choosing a car with a reputation for slow depreciation, like Toyota, can be a strategic investment and minimize the financial hit when it's time to sell.
Have a tip for our editorial team? Send us your scoop at [emailprotected].
Federal safety regulators have discovered nine more incidents that raise questions about the safety of Waymo’s self-driving vehicles.
Nissan thinks it can cut the cost of EV parts by 10% by shifting to gigacasting for large aluminum parts.
Tesla has launched a rare new paint color, Lunar Grey, as a $2,500 option on new Model S and Model X vehicles.
The United Auto Workers union is challenging the results of last week’s organizing vote of Mercedes-Benz workers in Alabama.
Survey finds consumers are more likely to click on vehicles with high-quality photos.
We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.
Are you an expert in dealership financials? HGreg is seeking a Senior Controller near Palmetto Bay, FL.
Interested in how EVs work at the wholesale level? Plug is looking to fill two business development roles.
More comfortable inside the dealership? Tom Whiteside Chrysler Dodge Jeep Ram has 5 open positions, including technicians, engineers, and sales associates.
Looking to hire? Add your roles today—it’s 100% free.
Thanks for reading everyone.
— CDG
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