With the combination of rising auto sales and low interest rates encouraging more lending to subprime borrowers, the personal-finance website WalletHub has released its first-quarter installment of its Auto Financing Report in conjunction with its in-depth analysis of 2017’s "Cities that Overspend on Cars."
• Interest rates for new cars are near their lowest point in three years, with the average new-car loan today charging 16 percent less interest than the average used-car loan.
• Compared with buyers who have excellent credit, those with fair credit will spend about six times more, or about $6,403, in interest over the life of a five-year, $20,000 loan when financing a vehicle.
• The best options for financing a new car include car manufacturers (rates at 43 percent below average) and credit unions (rate at 25 percent below average). Secondary options include national banks (rates at 2 percent above average) and regional banks (rates at 29 percent above average).
• Car manufacturers continue to lack transparency when it comes to leasing offers, with the average automaker receiving a WalletHub Transparency Score of 4.68 out of 10.
Here are the cities where residents spend the most on cars, according to the analysis:
College Station, TX
Rio Grande City, TX
San Marcos, TX
San Luis, AZ
Here are the cities where residents spend the least on cars, according to the analysis:
Chevy Chase, MD
Los Altos, CA
Manhattan Beach, CA
Palo Alto, CA
Foster City, CA
Garden City, NY