![]() A chip shortage, disruptions in the global supply chain and strong demand pushed prices higher. Household debt is rising.)Ĭar prices were rising long before the auto workers even raised the possibility of a strike. (Rejections are also up for mortgages, credit cards and other loans, as lenders recoil at the growing number of people falling behind on payments. The Federal Reserve Bank of New York said this month that the rejection rate for auto loans is now 14.2%, the highest since the bank started tracking figures in 2013 and up from 9.1% six months ago. High rates are contributing to a spike in rejections for consumers looking to buy a ride. The average rate for a new-car loan this week stood at 7.46%, and for a used car, it was 8.06%, according to Bankrate. Drury says leasing companies want their cars back while the used-car market is hot, and might be unwilling to extend the lease.Īnyone shopping for a new, used or leased car right now will also be hit by higher interest rates. ![]() “Used-car values, which have been seeing a bit of a decline from last year’s highs, could start going back up” as consumers look for an affordable alternative to new vehicles.Ĭonsumers who lease their vehicle and are coming to the end of the term could be especially vulnerable. “You’ll start to see that pricing gets affected everywhere - and not just on the new end of the business,” Drury says. Consumers who need a vehicle would likely turn to nonunion competitors like Toyota, Honda and Tesla, who would be able to charge them more. As cars from Ford, GM and Stellantis, the successor to Fiat Chrysler, become harder to find, there will be a ripple effect.
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