The interest rates charged on auto loans originated by General Motors, Ford, and Chrysler had their largest one-month drop in February since the Federal Reserve started tracking the data point nearly four decades ago.
The average interest rate on a Big Three car loan was 3.17% in February, down from 8.23% in March. The data was included in the Fed’s monthly release of consumer credit outstanding in the U.S.
The 61% drop was even larger than the falloff following the 9/11 terrorist attacks, when the average interest rate fell 53%.
In comparison, the average interest rate on a 48-month new-car loan at financial institutions was 6.92%, down 1.9% from November, which was the last time the Fed released that specific data point.
Such a precipitous drop on its interest rates is further proof of the lengths the Big Three are going to as what may be a last-ditch effort to preserve their operations. The Big Three had not averaged an interest rate this low since the fall of 2006.
