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By FinanceBuddy Staff Writer
Should you be a good quality borrower, the interest rate you would pay on your auto loan for a new car would, depending on your location, range between 6.18 percent if you happen to be in Kansas City, Mo., and 7.72 percent if you are out and about in Philadelphia, Penn. If you are out to buy a used car, you'd best be from Denver, Colo. (7.11 percent) or New York City, N.Y. (7.13 percent), and if you are in Los Angeles, Calif., you will pay the highest interest rate at 8.83 percent, according to HSH Associates, Financial Publishers. These figures are the average values made from 36 month, 48 month and 60 month averages, please note that auto loan pricing varies widely from one car reseller to the next, so compare prices before you purchase your car. Also, note that auto loan interest rates spiked on the chart from 0.2 percent at the beginning of February, after being in a steady decline following the hard 0.5 percent spike in January. Percentage applies to 48 month and 60 month loans, while 72 month loans' interest rates have not been affected. The lenders "cost of obtaining funds" is slowly decreasing, and the interest rates on short-term loans will likely decrease too. The lenders need to attract borrowers as well as depositors in order to make money. While some lenders will lower rates quickly in order to help attract new borrowers, some lenders will drift their rates downward more slowly and steadily, preserving wider profit margins. This drifting of rates is one of the reasons that Federal Reserve moves can take anywhere from six months to a year to be fully realized in the economy. It also means that loan rates for automobiles are likely to trend downward only mildly in the months ahead. You don't have much to wait for if you are planning to buy a car soon.