Auto Loan Rates Decline

Auto loan rates have been on a decline since the beginning of the year, unlike late in 2008 when the credit crisis was in full swing and the average auto loan rate was increasing.

Commercial banks' 48 month new auto loans were averaging 7.06 percent in the fourth quarter of 2008, up from the third quarter loan rate of 6.92 percent.

Auto finance companies' new auto loans averaged 7.09 percent in the fourth quarter of 2008, up considerably from the third quarter 2008 average of 4.87 percent.

The third quarter of 2009 saw auto bank rates decline to 6.61 percent for auto loans issued by commercial banks,  the third straight quarter of declines. New car loans issued by auto finance companies declined even more, the average car loan rate was 3.66 percent in the third quarter of 2009.

What is surprising about the Federal Reserve's Consumer Credit Report on auto loans is the average loan-to-value ratio has remained high during the entire recession.

The average LTV ratio in the third quarter of 2009 was 90 percent, up from the third quarter of 2008 when the average LTV was 89 percent. The average amount financed has also increased from $26,643 in the third quarter of 2008 to $27,884 in the third quarter of 2009.