2015 Auto Financing Report

by John S Kiernan

2015-Auto-Financing-New-BadgeIs it a good time to buy a car? Well, July witnessed over 5 percent year-over-year increase in U.S. light vehicle sales, bringing annualized projections to 17.35 million –more than last year’s output. Both General Motors and Ford enjoyed strong showings, particularly from SUVs, with the former posting a 13.4 percent annual increase in its utility vehicle category and the latter enjoying the growth of sub-brands like Buick, whose Encore model recently posted its 19th consecutive year-over-year sales increase and topped July 2014 numbers by 68 percent.

Domestic lenders also seem to be accommodating the evolving needs of car buyers, with the average loan term approaching six years as the average sale price continues to rise – up 2.5 percent in June to $33,340, according to the Kelly Blue Book.

It is thus clear why such a simple query – is now the right time to buy? – demands the consideration of such wide-ranging factors, from your monthly disposable income and what type of car you’re interested in to whether you should buy or lease and from where you’ll get the best financing. The data provided in this report, along with our panel discussion featuring top industry experts, will help you make those decisions. This information is based on a detailed analysis of financing offers from a diverse group of 158 lenders.

Key Findings

  • Interest rates for new cars are close to the lowest point of the last three years. However, the average new car loan now charges 19 percent less interest than the average used car loan.
  • Now is the time for people with excellent credit to buy used cars. The average interest rate for such buyers has fallen nearly 35 percent since the beginning of 2014.
  • Overall, buyers who have fair credit will end up spending about six times more to finance a vehicle than someone with excellent credit, which equates to $6,100 in additional interest payments over the life of a $20K, five-year loan.
  • People in the market for a new car should start their search for financing with car manufacturers (rates 61 percent below average) and credit unions (30 percent below average). National banks (10 percent above average), and regional banks (43 percent above average) should be secondary options.
  • Car manufacturers continue to lack transparency when it comes to leasing offers, with the average one receiving a WalletHub Transparency Score of 4.0/10. The most transparent manufacturers are currently Mazda, Infiniti, BMW, Acura, Mercedes, Honda, Volkswagen, Kia and Mini, and even they registered only a 6-point rating.
  • Toyota, Volkswagen, Kia, Ford, Dodge, Nissan and Buik offer the lowest financing rates out of the major car manufacturers we surveyed. Volvo, Mazda, Nissan and Toyota have the best leasing offers, on the other hand.
  • If you plan to keep your car for only three years, 95 percent of manufacturers will give you a better deal if you finance instead of lease. Nevertheless, always make sure to do the math in order to ensure you’re maximizing savings.

Who Offers the Best Rates?

Interest Rates for New & Used Cars

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Note: Above data is based on a 36-month term.
 

Financing Offers by Car Manufacturer

It is important for consumers to understand that car dealership financing offers may originate from the financing arm of a car manufacturer or from a third-party financial institution. The following offers reflect financing available directly from car manufacturers’ financing arms.

Car Manufacturer Financing APR Q3 2015 Lease APR (inferred interest rate) Q3 2015
Nissan 0.00% 3.06%
Toyota 0.00% 3.29%
Mazda 0.90% 2.86%
Honda 0.90% 3.36%
Chrysler 0.90% 3.41%
Lexus 0.90% 3.68%
Volvo 2.69% 1.94%
Kia 0.00% 4.83%
Ford 0.00% 5.02%
BMW 0.90% 4.42%
Volkswagen 0.00% 5.42%
Infiniti 1.99% 3.84%
Audi 2.90% 3.34%
Chevrolet 1.99% 5.03%
Subaru 1.90% 5.23%
Buik 0.00% 7.26%
Mercedes 3.49% 4.32%
Mini 1.49% 6.83%
Cadillac 1.88% 6.65%
Hyundai 1.90% 7.24%
Dodge 0.00% 10.41%
Acura 1.90% 8.52%
Average 1.21% 5.00%

Note: Above data is based on a 36-month term. The APRs presented for the financing and lease programs of the car manufactures are only informative. The actual values that one can obtain are based on various factors, including credit worthiness, income, location, promotional programs and, believe it or not, negotiation skills. Make sure to always check upfront with a dealer about the availability of any discounts for particular groups (i.e. USAA members) that you might qualify for as well as whether any other costs and/or restrictions may be imposed, especially in the case of lease contracts.

Rates Over Time

Historical Interest Rates

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Note: Above data is based on a 36-month term.

Excellent vs Fair Credit Score

Excellent vs Fair Credit Score - Interest Paid Over a 5 Year Car Loan

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Note: Above data reflects a $20,000 five-year loan for a new car with a fixed interest rate, using WalletHub’s interest rate data from Q3 2015.

Excellent vs Fair Credit Score over time

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Manufacturer Transparency

Leasing offers are the most difficult type of car purchasing arrangement for consumers to understand, as they lack the equivalent of an APR that can be used for comparison purposes. As a result, the transparency of manufacturers about these deals is integral to a consumer’s ability to make informed decisions.

Manufacturer Transp. Score Q3 2015 Manufacturer Transp. Score Q3 2015
Mazda 6 Ford 3
Infiniti 6 Dodge 3
Mini 6 Audi 3
BMW 6 Volvo 3
Acura 6 Lexus 3
Mercedes 6 Buick 3
Honda 6 Cadillac 3
Volkswagen 6 Chrysler 3
Kia 6 Subaru 2
Toyota 3 Chevrolet 1
Nissan 3 Hyundai 1

Ask the Experts

If you aren’t carefully monitoring the trends in car sales, you might price yourself out of a good deal — or buy at the wrong time. For additional insight into the car-buying process and related issues, we asked a panel of leading experts to weigh in. Click on the experts’ profiles to read their bios and responses to the following key questions:

  1. On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?
  2. Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?
  3. What steps can buyers and dealers take to make the car buying process more transparent and hassle-free?
  4. What tips do you have for individuals with fair or poor credit who are looking for an auto loan?
  5. What are some signs that you may be getting ripped off in the auto financing process?
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  • Bruce Howard Professor of Business at the Wheaton College
  • Farrokh Kahnamoui Visiting Assistant Professor of Economics in the Department of Economics at Western Washington University
  • Nilton Porto Assistant Professor at the University of Rhode Island
  • Jean Lown Professor in the FCHD Department at the Utah State University
  • Genna Brown Lecturer in Finance at Georgia State University, Robinson College of Business
  • Jeffery S. Bredthauer Assistant Professor of Finance, Banking and Real Estate at University of Nebraska Omaha
  • Carolyn Reichert Clinical Associate Professor of Finance and Managerial Economics at University of Texas at Dallas, Jindal School of Management
  • Lawrence J. White Robert Kavesh Professor of Economics at New York University, Stern School of Business
  • Andreas Rauterkus Associate Professor of Accounting and Finance at University of Alabama at Birmingham, Collat School of Business
  • Marilynn Hood Lecturer in Finance at Texas A&M University, Mays Business School
  • Russell Stevens Adjunct Assistant Professor of Business and Management at Hope International University
  • Rebecca Neumann and Saleh Sahabehtabrizy Associate Professor of Economics and Teaching Assistant, respectively, at University of Wisconsin-Milwaukee
  • David Lander Adjunct Professor of Law at Saint Louis University School of Law
  • Michael Smitka Professor of Economics at Washington and Lee University
  • Brian Larson Associate Professor of Marketing, Widener University
  • Frank L. DuBois Chair and Associate Professor of International Business, Kogod School of Business, American University
  • Jack Tracey Executive Director, National Automotive Finance Association
  • Nihal Bayraktar Associate Professor of Economics, Penn State Harrisburg
  • Michael B. Behrmann Department Chair and Associate Professor of Automotive Technology, Southern Illinois University, College of Applied Sciences and Arts
  • George Belch Chair and Professor of Marketing, College of Business Administration, San Diego State University
  • Donald Grimes Senior Research Specialist, Institute for Research on Labor, Employment and the Economy at University of Michigan
  • Todd J. Zywicki GMU Foundation Professor of Law, George Mason University School of Law

Bruce Howard

Professor of Business at the Wheaton College
Bruce Howard
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

Yes. Interest rates are low and dealers are trying to close out the 2015 year models to make room for 2016’s.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

This is hard to say. If the stock market goes into a deep correction, then I wouldd expect more incentives later in the year. But there are currently some good deals out there.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Get as much information ahead of time as you can. Use the internet to get a printed offer that you can then take into the dealership and say "this is what I would need to make the deal today."

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Credit scores are certainly not a perfect system but they are generally correlated to a person’s ability to repay the debt that they are looking to take on. If people have a low credit score, then I would advise them to take on as little debt as necessary in order to purchase safe reliable transportation. Avoid the bells and whistles that pump up the price of a car. The goal should be safe reliable transportation.

What are some signs that you may be getting ripped off in the auto financing process?

When someone starts the process by asking "how much of a monthly payment can you afford?", it is a sign that they aren’t really looking out for your best interests because they can inflate the price of the car by extending the number of "monthly payments" you will have to pay.

Farrokh Kahnamoui

Visiting Assistant Professor of Economics in the Department of Economics at Western Washington University
Farrokh Kahnamoui
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

I would give this a 9 and the reason is that interest rates will most likely go up in the future and not down so if one wants to finance a car this is the time to do it.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

I expect it to get worse since interest rates will very likely go up over the next 12 months.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

For buyers: do your homework, look up the car you are interested in (Kelly Blue Book, Edmund's) to get the manufacturer's suggested price, the dealer's invoice, any rebates or financing incentives and resale value. Think about the maintenance costs, some foreign models (Mercedes and BMW for example) have high maintenance costs. If buying a used car look up Car Facts to get the accident history of the car. For dealers, show the buyer all the facts and figures related to the car that include the profit you expect to get (it is very unlikely this one would happen though!)

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Find a cosigner, pay a large down payment, show them proof of your other strengths if you have them such as steady employment, steady payments of paying rents if renting and investments in stocks or bonds (IRA, 401K).

What are some signs that you may be getting ripped off in the auto financing process?

Do your homework beforehand, do rate and down payment shopping and choose the best one. Beware of extra warranties that the dealers may want to push on you.

Nilton Porto

Assistant Professor at the University of Rhode Island
Nilton Porto
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

I would give it an 8 for two reasons. First, this is the time that dealers are starting to receive next year’s inventory and want to sell the current year models. Second, interest rates are still at historically low levels.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Get worse. The overall improvement of economy (despite recent stock market drops) gives dealers less incentive to offer special deals since more people can afford to buy at “full price”. In addition, interest rates might increase making financing more costly. Lower gas prices forecast for the next 12 months also help car sales and help move inventory of larger vehicles (SUVs) where dealers usually make more profit.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

I believe the market is already very competitive and efficient for new cars and most used car dealerships. The internet has helped consumers be more informed and able to do some homework before shopping for a car. It is up to us – consumers –to do smart research before buying or securing finance.

Auto financing contracts could be more informative by adopting procedures similar to the Card Act of 2009: clear interest rate/APR (not just monthly payments), total cost of the loan, and details on the ability to prepay or pay it faster. Currently, consumers seem to be too focused on what kind of monthly payment they can afford instead of the actual loan rate.

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

If possible, wait another year before getting the auto loan and use this year to improve your credit score. First, figure out why your credit score is low: new credit, late payments, high utilization, etc. The next step would be to make all your credit payments on time and to reduce your credit usage/utilization (the ratio of your all credit balance over your available credit limit). Keeping everything in good standing for 12 months may help improve your score by 100 points.

If you cannot wait, another option is to plan to refinance the auto loan in a year or so if your initial rate was too high. This is a bit risky and would not work for new vehicles since the value of the loan would be upside down as soon as you leave the lot – you have to buy a used car. However, in a used car loan with a good down payment, you might be able to refinance to a lower rate in the near future. Make sure there are no pre-pay penalties on your loan!

Buy here, pay here deals are usually very costly and should be used only as a last resort. This type of financing is very expensive since the contract might be full of extra fees and restrictions on your ability to pay earlier/faster.

What are some signs that you may be getting ripped off in the auto financing process?

Pressure to disclose how much you can afford, trade in value, and cash available for down payment might be a bad sign. My advice is to focus on getting the best auto sales price first and then discuss the financing. If you cannot agree on the value of your trade-in, tell your dealer that you will sell it privately and come back later to purchase the vehicle.

Beware of unnecessary add-ons such as GAP insurance, extended warranty, and auto packages such as rust shield. They add to the amount financed and the cost of your loan. Dealers use these to have more leeway on the purchasing price too – you were getting a good deal until all these extras started popping up in the contract!

I would also recommend to stay away from conditional contracts – just tell the dealer you will wait until they (or you, the customer) can secure final finance.

Jean Lown

Professor in the FCHD Department at the Utah State University
Jean Lown
What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Join a credit union and save money for down payment.

What are some signs that you may be getting ripped off in the auto financing process?

All "Buy here-Pay here" dealers are suspect.

Genna Brown

Lecturer in Finance at Georgia State University, Robinson College of Business
Genna Brown
Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Since auto dealers are offering 0% forever, 7 year loans on 100% financing, I can't imagine that it would improve, as interest rates increase (surely at some point). Unless dealers pay you to take the car, how can it improve?

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Be an informed consumer. Look up your auto's value before you go to the dealer/broker/whatever. Know what options cost. There are numerous sites that help with this (Blue book, etc. Not so sure about the new TrueCar.com. I have not investigated it.)

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Ride the bus. Save your money. Pay off bad debts. Do not accumulate new debts until you have repaired your credit.

What are some signs that you may be getting ripped off in the auto financing process?

You are getting ripped off. No need to look for signs. Pay attention to what they are charging you. Calculate the payment yourself (it's 4 buttons on a calculator) to assure they are not adding fees or other charges that are not clear.

Jeffery S. Bredthauer

Assistant Professor of Finance, Banking and Real Estate at University of Nebraska Omaha
Jeffery S. Bredthauer
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

I would say this (mid-spring) is an average time of the year to buy. I think the best time to buy is either at the end of December, just prior to the New Year, or mid-summer, when the new model year cars are coming out and dealers are trying to liquidate existing inventory.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

I would predict that with the Federal Reserve preparing for rate increases, auto financing may get marginally worse (increase) over the next 12 months.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Buyers should approach the process and at the outset inform the dealer they want to cut to the bottom line immediately to hopefully avoid the "dance" of back and forth negotiation, which typically accompanies the auto purchasing process. Dealers know that informed buyers use the Internet to determine the invoice price paid; as such they should start with that price and inform the buyer they must include a markup in order to stay in business.

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

First, if you can't afford a new or (new) used car, don't buy it. Make do with what you currently have. If you must buy with credit, take steps to improve your credit scores so as to avoid higher risk interest rates. Also, be careful to avoid predatory lending practices, which would require exorbitant interest rates, "balloon" payments or pre-payment fees.

Carolyn Reichert

Clinical Associate Professor of Finance and Managerial Economics at University of Texas at Dallas, Jindal School of Management
Carolyn Reichert
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

Assuming you mean mid-May, then I would lean towards a 5. It is okay. The best times are month end or quarter end since dealers often need to meet quota. Historically, the model year changes in September-October, so you can get good deals on older models as they make space for new inventory. This suggests that August – September are a better for buying a car.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Deals may improve slightly to push inventory before the new models arrive or to spur demand for a specific vehicle. Overall demand for autos is fairly strong, and people who put off buying a car are now looking to purchase. This means less need for incentives, and in general, incentives will remain flat.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Buyers need to do their homework. They need to know how much they can spend on a vehicle. This includes the down payment, the monthly payments, insurance, fuel and maintenance. This tells them how much car they can afford. The buyer then needs to look for vehicles at that price point. This means knowing the base price, as well as the cost for added features. This information allows them to negotiate with the dealership. They need to remember that the dealership does need to make a profit. Finally, the buyer should check for any financing deals or incentives and should get loan or lease estimates from several financial institutions. This allows the buyer to evaluate the deal and get the best financing alternative. There are a number of applications and web sites to make this easier.

Dealers know buyers have access to more information than ever before. Dealers need to offer a fair price with a convenient and streamlined shopping experience. Ratings should be standardized to make comparisons easier across vehicles and dealerships. The pricing should be clear and concise. A convenient menu that lists options and prices would allow buyers to decide which features to add. This could include customization options specific to the dealership.

The financing should be streamlined. The majority of the paperwork could be completed electronically before arriving at the dealership. At a minimum, the buyer could complete a pre-check electronically that would speed the remaining paperwork. With a pre-check, the buyer could be certified for a maximum amount on a lease or loan. If the actual loan or lease was below the maximum, then the paperwork would be minimal. The pre-check would be good for a limited period at all participating dealerships.

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Obviously, the best thing to do is waiting until their credit has improved. Find out why the credit rating is low and take steps to improve it. If that is not an option, then they need to shop around for the best alternative. This involves looking at the APR (annual percentage rate), the loan terms and any incentives. They should look beyond subprime lenders to include banks and credit unions, particularly ones with experience in auto loans. Insurers and employers may offer assistance with the buying process as well. They can also check their local area for classes on money management. The buyers need to be realistic on the amount of car they can afford and how long they want to make payments. The loan should have a low APR over a short period of time with clear terms that are final. There are web sites on auto credit and comparing loan terms that buyers can use.

What are some signs that you may be getting ripped off in the auto financing process?

Check the terms of the contract. The APR and the contract terms should be clearly laid out, including the length of the loan and any down payment. Make sure the contract terms are final (not contingent or conditional). Beware of loans that require you to buy additional items (such as an extended warranty). You should be able to review the documents before you sign them. If they aren’t willing to let you do this, then you need to be wary. Check the reputation of the lender and the dealership for any complaints and for their Better Business Bureau rating. If the deal doesn’t feel right or seems too good to be true, then walk away and get another opinion.

Lawrence J. White

Robert Kavesh Professor of Economics at New York University, Stern School of Business
Lawrence J. White
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

7.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

It will get a little worse. Interest rates may rise a bit.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Buyers can do the research beforehand. Dealers can be clear about what is being sold. Both should be clear as to the price that is being paid for a trade-in (if any).

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

If an individual has a relationship with a financial institution -- e.g., a bank or a savings institution, or a credit union -- start there. Find out the terms of their car loans. Otherwise, shop around.

What are some signs that you may be getting ripped off in the auto financing process?

If the person can't get a clear answer as to what the interest rate or monthly payments will be.

Andreas Rauterkus

Associate Professor of Accounting and Finance at University of Alabama at Birmingham, Collat School of Business
Andreas Rauterkus
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

I would say as long as interest rates are as low as they are right now, it's certainly a great time to buy a car. So at least 8.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

It's a function of interest rates. The general expectation is for interest rates to increase and thus, financing deals will get less attractive. There will always be the 0% financing deals, but we have to remember that those require excellent credit and probably only about 25% of car customers actually qualify for those.

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Instead of using lot financing, approach a bank or, even better, a credit union and inquire about financing options. Credit unions generally offer the lowest rates. Don't fall for the easy monthly payment options offered by a lot of used car dealers. Those usually carry very high interest rates.

What are some signs that you may be getting ripped off in the auto financing process?

When shopping for a car loan, do your homework and have some idea what the current interest rates are. A lot of car financing deals are offered to you assuming that you have no idea what kind of loan you can get. In addition, be aware of fees. Generally, there should not be any closing fees involved. The longer the list of fees, the more suspicious you should get. Number one, know what you can qualify for by checking with a bank or credit union, maybe even have a credit commitment in hand. Information is the strongest negotiation tool.

Marilynn Hood

Lecturer in Finance at Texas A&M University, Mays Business School
Marilynn Hood
Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Rates should remain low. However, just because you can get a low rate on the loan doesn't mean you have negotiated the best price on the vehicle. Additionally, you need to plan ahead of time which extra deals they throw at you when you're in closing that you want to purchase. The extended warranties, etc., can add thousands to your total cost. So even if you have negotiated a rock bottom purchase price, dealers can easily make up their margin by persuading you to purchase these add-ons when they have you pinned down in that little office signing on all the dotted lines. And here's a tip: if you do decide to purchase some of these extras at closing, ask if they can give you a better price on the item or just include it with the purchase price of the vehicle. Sometimes they will negotiate even on those things.

Russell Stevens

Adjunct Assistant Professor of Business and Management at Hope International University
Russell Stevens
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

9.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

I like the no-haggle shops, but they have to prove good prices to do that.

What are some signs that you may be getting ripped off in the auto financing process?

I think the old process of the salesperson going to the back office to ask a manager is the biggest sign of a rip-off.

Rebecca Neumann and Saleh Sahabehtabrizy

Associate Professor of Economics and Teaching Assistant, respectively, at University of Wisconsin-Milwaukee
Rebecca Neumann and Saleh Sahabehtabrizy
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

7.5. The rates are still fairly low, which makes it a good time to purchase a car. Towards the end of summer, however, the deals are likely to be even better. The decision to buy a car should be based not only on the financing and sales available, but also on each individual's personal situation.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

As credit markets tighten over the next 12 months, the benchmark interest rates are expected to rise slightly. Given the current economic outlook, an increase in car loan rates, which depend upon the benchmark interest rate, is also likely. Yet, the magnitude may not be of great significance. For those with the very best credit scores, a small movement in benchmark interest rates may raise the rate slightly. But the available rate for any given individual is going to depend not only on the benchmark rates (i.e., the federal funds rate and its effect on the prime interest rate) but also on the credit report/credit score for an individual.

Financing in general is expected to become more expensive as the Federal Reserve takes steps to wind back on quantitative easing. For the near future, however, interest rates are expected to stay fairly low.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Car dealers don't necessarily have any significant incentives to make the purchasing process "more transparent and hassle free." They are already operating in a fairly competitive market, and greater transparency may not work to their advantage. On the contrary, asymmetric information may greatly contribute to their margin. As for the buyers, it is important that they make use of the car companies' websites as well as the online ratings to educate themselves on the varieties that are available to them in the market. They should also get an estimate on how much they can afford to pay for, based on their individual projected cash flow. Then, given their search and their ability to pay, they should go on a hunt, telling the dealers that they will be on the market for a while and are looking for different brands and models. Buyers should take their time; they should never go after a narrow niche (i.e., a particular brand or model); and they should always keep their options open. Greater information brings better deals for consumers in this market.

To get the best deal possible, consumers need to be willing to walk away from the deal. Consumers also should know their financing options ahead of time (including the potential interest rate that they might get given their credit score) so that they understand completely any financing that they are offered directly from the dealership.

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Almost no one can build great equity in a vehicle. Car values drop significantly after the purchase. (Exotic cars are exceptions.) Thus, it may be important to consider the used car market, should a customer finds that he/she has bad credit. Avoid loan sharks, and make use of credit unions' car loans to purchase a fairly cheap used car. Consumers can use any number of online financing calculators to see what they will need to pay for a given loan on a vehicle.

What are some signs that you may be getting ripped off in the auto financing process?

As indicated above, the key is to educate yourself on the prices and the rates in the market. Once you take your time to do so, you will have a proper understanding of the rates and the terms. Then, it will be fairly easy to distinguish between a good deal and a bad deal.

Also, keep in mind that you should always compute the precise value of your purchase (there are a number of financial calculators that are available online that can do this for you). This is one of the things that we teach in our Economics of Personal Finance class at University of Wisconsin - Milwaukee. We use concepts based on the time value of money to help students understand what they will need to pay for a given loan (e.g., for student loans, car loans, home loans). Understanding a bit about these calculations can add some transparency to the borrowing process. During the course, students are required to calculate the payments directly themselves using present value (or future value) concepts. After the course is over, the hope is that understanding these calculations will help students be better informed consumers. While we don't really expect that students will use the formulas to calculate the payments directly themselves in the future, they will be better able to understand the financing options that may be presented by a lender or by a car dealer. Those who understand the impact of interest rates, the amount of down payment, the length or term of the loan, and the amount of the monthly payment will be better able to negotiate over the price and/or the payments involved.

In the end, if a deal doesn't feel right, then walk away. There are plenty of other options and plenty of competition within the auto market.

David Lander

Adjunct Professor of Law at Saint Louis University School of Law
David Lander
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

8.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Stay about the same, in the short run.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Read as much as possible about the process of identifying and buying a car. If possible, have two or three types of car as a choice so you can bargain.

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

Buy from as reputable a dealer as possible. Ask friends and family.

What are some signs that you may be getting ripped off in the auto financing process?

Rush, lack of transparency.

Michael Smitka

Professor of Economics at Washington and Lee University
Michael Smitka
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is this a good time of year to buy a car?

There is some seasonality, but much less than in the past. If you know what you want and can wait, then watch prices towards the end of the model year, which varies by model. Be prepared however to not get the exact color that you might desire.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

From the consumer perspective, I don't expect much change. The main thing is to try to avoid being pushed into the buy-here, pay-here market for older used vehicles. If you don't have a good credit rating, try to find a better used car and buy it outright.

What steps can buyers and dealers take to make the car buying process more transparent and hassle free?

Well, it's relatively transparent if you do your homework. When I last shopped for vehicles, I found a $2,000 [10%] gap between the best and worst deal I was offered. If you try to buy quickly or without doing your homework, the sales people will recognize that.

Know what you want before you enter the dealership. Don't be up-sold.

One crucial thing is to know your finance options in advance, and to realize that extended warranties and similar insurance products are very expensive so decide if you really want such. If you negotiate a good price on a car but then don't know your finance options, you can end up paying more at the back end.

Note that by accepting a longer term you can lower your monthly payment. But an 84-month loan will leave you "upside down" (owing more than the car is worth) for many years. If you plan on keeping a car only for 5 years, then don't take out a loan longer than 5 years!

Your first and foremost goal should be reliable transportation that meets your personal / family needs. If you want status, fine, but make sure you can afford it. Most people buy cars (light trucks!) bigger than they need, and with more power than they ever use. If you only need the extra space for that annual vacation, buy a smaller car and rent a bigger for that once-a-year need!

What tips do you have for individuals with fair or poor credit who are looking for an auto loan?

As above, avoid buy-here, pay-here. It's bad to end up with an unreliable used car, but it can be even worse to buy a car with expensive finance.

What are some signs that you may be getting ripped off in the auto financing process?

If you don't know your financing options, then you will likely pay more than you should. Be prepared to walk away at the last minute -- don't sign anything until the entire deal is lined up, and if you're suspicious, well, go to another dealership.

But be realistic: do you have good credit? Can you make a bigger down payment? My goal is to put 50% down. That keeps me realistic -- and gets me the best interest rate and keeps my monthly low.

One final point: plan your purchase. If you lose your car in an accident, rent for a week or so to avoid making a rushed decision.

Brian Larson

Associate Professor of Marketing, Widener University
Brian Larson
Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Stay the same or get mildly worse. Consumer confidence is improving and they have more money in their pockets - they will spend. As spending by US consumers’ increases in a sound economy, typically the FED's response is to tighten money supply which could lessen the finance deals for auto buyers.

Frank L. DuBois

Chair and Associate Professor of International Business, Kogod School of Business, American University
Frank L. DuBois
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

I would say 9 or 10 since we are looking at an improving economy in the USA but challenges abroad - stronger dollar will also mean better deals on imported vehicles from Europe and Asia.

Consumers that have delayed purchases are now getting forced into looking for cars as maintenance and repair costs on older cars rise. Also as fuel prices have dropped consumers are less worried about fuel efficiency and so prices on smaller cars have softened.

So it really depends on the car you are looking for - all of the cars out there are getting better and better in terms of quality and reliability - the gap in quality between US and Japanese cars has narrowed considerably and U.S. manufacturers are producing some interesting vehicles that compete successfully with imports. Lower fuel prices will lead to more driving and more demand for cars.

Used car market is challenging in the absence of financing options; consumers don't have the 5-10K cash to buy used, unless they can get financing from dealers.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Expect financing deals to stay the same. Banks and captive lenders representing manufacturers have extended loan maturities to keep monthly costs down on high cost (>$25K) cars. 72 month loans are becoming more common versus 48 and 60 months. Cars are lasting longer though. Creditworthiness of borrowers is critical, much easier to foreclose on a car than a house.

Jack Tracey

Executive Director, National Automotive Finance Association
Jack Tracey
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

I’d give it a 10 now for several reasons. Production levels are very high at the manufacturers. They’re making lots of cars. There are lots of cars in the market. The underlying funding in the industry now is low. The financing market in all areas is being supported by very, very low government funding rates. As such, the ability to get money at a low rate and then turn around and use it to finance vehicles keeps the rate low. The rates can even be lower for the non-prime sector. There is an awful lot of competition out there amongst the people that are financing, so there’s a pressure to keep rates as low as they can be because everybody wants a piece of this very active market. The other thing is, the used car market is healthy.

All of the components necessary to have a brisk and competitive environment are in place. And when all of those things are in place, the consumer comes along to get a car and get it financed, he’s got a much better opportunity than when we were in the midst of the financial crisis. These dynamics weren’t in play, so it wasn’t as easy or as good of an opportunity. But right now, yeah, it is. And that’s demonstrated by the fact that so many car loans are being made now. My advice would be if somebody is thinking about getting a car, now would be a great time to step into the market.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

I would say that they’ll probably stay the same. The government has said they’re not going to start raising interest rates. They’re going to do it very slow and methodically.

You know, we’re at I think 16 million new cars produced in the country. We were down to 12 million when we were in the throes of the financial crisis. My hesitancy would be: Are the manufacturers able to produce product in sufficient quantities for a continued healthy marketplace? And, yeah they will. They’ll put on extra crews and shifts.

So, my answer to that is, for the next year the window will remain pretty much as it is now. And the economists and whatnot that speak into our industry also say that, that the short-term outlook is very good.

Is there anything unique going on in the non-prime sector of the market that many people might not think about?

A lot of people, when they've had difficulty with their finances, really feel that they can’t go into the market, that they’re sort of weakened in their ability to negotiate and do a deal. People really shouldn't feel that way. The market is such that there are a lot of finance companies competing for the business. Those that are in the non-prime space know that people do, from time to time, have problems. So they’re all competing for the same customer and the customer shouldn't be hesitant because there was a default on a student loan or something like that. Yeah, there will be higher rates than there would be if you were just a prime customer, but since there’s so much competition in the non-prime area, the difference between what the prime bar would get and the non-prime is competitively set. So, there’s going to be increased amount but it’s not going to be excessive.

Nihal Bayraktar

Associate Professor of Economics, Penn State Harrisburg
Nihal Bayraktar
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

If it is asked to me whether it is now a good time to buy a car, I would say 8 on a scale of 1 (an emphatic no) to 10 (an emphatic yes). Currently, interest rates are historically low. This fact makes purchasing cars very attractive.

We have these low interest rates in the financial markets thanks to easy monetary policies of the Federal Reserve System, the central bank of the United States. Nobody can be sure when it actually will happen, but the Federal Reserve is expected to start reversing the easy monetary policy around mid-2015. This policy change is expected to increase interest rates in the financial system, including on consumer loans.

Thus, I personally believe that it is a right time to buy a car, especially if it is financed with loan. The reason for not going with 10 on the scale is that there is always a chance that the cost of borrowing can remain low more than a year. In this case, there may not be much difference in terms of purchasing the car right now or later as long as interest rates are stable.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Overall, I expect auto financing deals to get worse, meaning that higher interest payments will be asked, if the Federal Reserve changes their easy monetary policy and starts targeting higher interest rates. But it would stay the same over the next 12 months if the Federal Reserve does not change their current policies. So everything depends on monetary policies of the Federal Reserve.

Michael B. Behrmann

Department Chair and Associate Professor of Automotive Technology, Southern Illinois University, College of Applied Sciences and Arts
Michael B. Behrmann
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

I rate the current climate for buying a newer car as 10 out of 10.
  1. Manufacturers have numerous new or refreshed models hitting the dealers’ lots right now that incorporate many of the latest safety and convenience systems. The safety of today’s vehicles far exceed those from just a few years ago. Systems such as electronic stability control (ESC) can help minimize loss of vehicle control by keeping the vehicle on the road and heading where intended. The National Highway Traffic Safety Administration estimates that ESC systems can reduce single-vehicle crashes of passenger cars by 39% and single vehicle crashes of sport utility vehicles by 59%.

    Other systems such as adaptive speed control, lane departure/assist systems, park assist, integrated Wi-Fi and keyless access systems that unlock or even open access door can not only make ones driving experience safer, but possibly more enjoyable. Buying a newer car can provide a significant improvement in safety protection.
  2. Interest rates for vehicle purchases can still be found at very reasonable rates and near historical lows. Although rates for new vehicle loans have crept up some since last year, most consumers can still find very reasonable rates to accommodate various payment options.
  3. A consumer may still find a few new 2014 model year vehicles on the lots. With the new 2015 model year vehicles arriving, one may find some great deals on the 2014’s.
  4. Many manufacturers also have various incentive packages available for the consumer. From cash back to low or no interest financing, all of those may help when looking to purchase a new car.


Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

With the improving economy, I do expect auto financing loan rates to increase some over the next 12 months. The wildcard may be how closely manufacturers want to keep their inventory levels and production rates in check. Small changes may impact the offering or elimination of various incentive packages. With sales of new vehicles for many manufacturers over the past year showing dramatic increases, holding out for a better incentive package to arrive may not happen.

All of this combined, now is an exceptional time to consider a newer vehicle.

George Belch

Chair and Professor of Marketing, College of Business Administration, San Diego State University
George Belch
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

Regarding whether it is a good time to buy a car I would rate it a 7 to 8. The low interest rates and in some cases zero percent financing being offered by some automotive companies make it very attractive to purchase a car right now. Since an automobile is a depreciating asset, it is probably better to finance it and the low rates make it easier to do so.

Also, many automotive dealers are offering rebates and other financial incentives as the market is very competitive right now for most vehicles. Thus buyers should be able to get significant reductions on many models if they shop around and are patient.

The only down side is that prices keep increasing as the average price of a new vehicle is now around $32,000 which is very expensive, particularly for middle class consumers. However, it is unlikely we will see a decline in prices, particularly if the economy continues to recover and auto sales continue to increase.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

Auto financing deals will be tied to overall interest rates and Federal Reserve policies. If the Fed decides to increase interest rates it is likely that the increase will impact rates for auto loans. However, it is possible that automobile companies will subsidize the rates as a promotional incentive which might keep them low.

Donald Grimes

Senior Research Specialist, Institute for Research on Labor, Employment and the Economy at University of Michigan
Donald Grimes
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

Sales have been much stronger than I expected, so keep that in mind as I answer the questions. I would say that right now is not a good time to buy a car, so I would say a 3.

Do you expect auto financing deals to improve/get worse/stay the same over the next 12 months?

The deals are not very good and in answer to this question, I think they will get better over the next 12 months. This is especially true of Japanese and European vehicles, where the stronger dollar will encourage the foreign auto companies to offer much better prices, either through a direct reduction in price or more likely a better incentive package. That increased competition will force U.S. nameplates to respond in kind.

Todd J. Zywicki

GMU Foundation Professor of Law, George Mason University School of Law
Todd J. Zywicki
On a scale of 1 (an emphatic no) to 10 (an emphatic yes), is now a good time to buy a car?

It seems obvious to me that eventually, interest rates on car loans will have to rise. Historically, about 80% of the fluctuations in car loan rates are tied to the cost of funds, which are tied to the Fed's rates.

So I'd say that rates are likely to creep up over the next 12 months, although not much. And so I'd give about a 5 or 6 on whether it is a good time to buy.

Methodology

  • We reviewed auto financing offers from 158 lenders for this report, including 27 Community Banks (<$1 billion in total deposit volume) and Small Banks ($1 billion to $10 billion in total deposit volume), 47 Regional Banks $10 billion to $100 billion in total deposit volume), 10 National Banks (those with a National footprint), 52 Credit Unions and 22 Car Manufacturers.
  • For comparison purposes, we used 36 months as the repayment term for both financing and lease programs.
  • The following assumptions were applied for bank-originated loans: $20,000 loan - new cars, $10,000 loan - used cars, 80 percent LTV, excellent credit score (720+).
  • In order to calculate the “Lease APR,” we used the following methodology:
    • The difference between the price of the car in the beginning and the end of the lease represents the amount that someone “borrows” when they lease a car.
    • By multiplying the monthly payments with the term of the lease we obtain the total amount paid for that contract.
    • The difference between the total amount of payments on the lease contract and the amount “borrowed” represents the total amount of interest, in dollars, that was paid during that period.
  • Car manufacturer loan and lease data was obtained from manufacturer websites, where available, or were contacted directly. The following assumptions were applied: excellent credit score (720+) and an annual expected mileage for the lease program of 15,000.
    • For each car manufacturer, APR data was requested for the most popular model according to an AutoNews study published quarterly – utilizing the most basic equipment options available.
    • For the price of the car we used the Manufacturer Suggested Retail Price “MSRP” minus any applicable dealer discount. The list of cars is the following:
Car Manufacturer Car Model Q3 2015 Price of the Car
Honda 2015 Honda Accord Sedan LX Automatic
2015 Honda Accord Sedan LX CVT
$20,800
Toyota 2015 Toyota Camry SE Sedan Automatic
2015 Toyota Camry SE Sedan Automatic
$23,088
Volkswagen 2015 Volkswagen Jetta Sedan S Automatic
2015 Volkswagen Jetta Sedan S Automatic
$22,700
Chevrolet 2015 Chevrolet Cruze Sedan LS Manual
2015 Chevrolet Cruze Sedan LS
$16,237
BMW 2015 BMW 3 Series -320i Sedan
2015 BMW 3 Series -320i Sedan
$30,850
Nissan 2015 Nissan Altima 2.5 S
2015 Nissan Altima 2.5 S
$20,758
Hyundai 2015 Hyundai Elantra SE Manual
2015 Hyundai Elantra SE
$16,483
Kia 2015 Kia Optima LX
2015 Kia Optima LX
$19,440
Chrysler 2015 Chrysler 200 Limited Sedan
2015 Chrysler 200 Limited Sedan
$19,540
Mazda 2015 Mazda3 4-Door i SV
2015 Mazda3 4-Door i SV
$23,710
Acura 2015 Acura ILX 5-Speed Automatic
2015 Acura ILX 5-Speed Automatic
$31,656
Subaru 2015 Subaru Outback 2.5i
2015 Subaru Outback 2.5i
$28,043
Ford 2015 Ford Fusion SE
2015 Ford Fusion SE
$22,371
Dodge 2014 Dodge Charger SE
2015 Dodge Charger SE
$30,190
Audi 2015 Audi A4 2.0T FWD Multitronic
2015 Audi A4 2.0T FWD
$34,000
Infiniti 2014 Infiniti Q50 3.7
2016 Infiniti Q50 3.7
$34,310
Mini Cooper 2015 Mini Cooper Hardtop
2015 Mini Cooper Hardtop
$25,053
Volvo  2015 Volvo S60 T5 Drive-E FWD
2015 Volvo S60 T5 Drive-E
$37,054
Mercedes-Benz 2015 Mercedes-Benz C-Class Sedan
2015 Mercedes-Benz C-Class Sedan
$50,106
Buick Buick-lacrosse
2015 Buick LaCrosse
$42,100
lexus-logo Lexus-ES-300
2015 Lexus ES 300
$35,940
Cadillac-logo 2015 Cadillac ATS Sedan RWD 2.5L Standard
2015 Cadillac ATS Sedan RWD 2.5L Standard
$30,132

Car Manufacturers and Dealers Transparency
How easy it is to obtain complete financing and lease information from car manufacturers and dealers? – Worth 10 Points Total

  1. When lease information is provided on the manufacturer/dealer’s website, how complete is the info? – Worth 5 Points Total
    • Monthly Payment + Lease Term – 0 points
    • Price of the Car – 1 point
    • Down Payment – 1 point
    • Residual Value – 3 points
  2. Does the manufacturer/dealer provide complete lease info on its website for any car combo a consumer may choose? – Worth 1 Point Total
    • Yes - 1 point
    • No - 0 points
  3. How prevalent is the lease information provided on the manufacturer/dealer’s website? – Worth 2 Points Total
    • Complete Info is not Provided – 0 points
    • Complete Info is Provided but it is on Fine Print or Hard to Find – 1 point
    • Complete Info is Provided and it is Prevalent – 2 points
  4. Does the manufacturer/dealer provide complete lease info offline? - Worth 2 Points Total
    • Both Car Manufacturers and Car Dealers are Willing to Provide Complete Info – 2 points
    • Only Car Manufacturers are Willing to Provide Complete Info – 1 point
    • Only Car Dealers are Willing to Provide Complete Info – 1 point
    • Neither Car Manufacturers and Car Dealers are Willing to Provide Complete Info – 0 points

 

Historical Data

Car Loan APRs 2013-2015

Q2 2015
(vs. last yr)
Q1 2015
(vs. last yr)
Q4 2014
(vs. last yr)
Q3 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q1 2014
(vs. last yr)
Q4 2013
(vs. last yr)
National and Regional Banks - New Cars 4.28%
(-1.45%)
4.29%
(-2.44%)
4.31%
(-3.20%)
4.33%
(-2.55%)
4.34%
(-3.74%)
4.39%
(-5.26%)
4.45%
(-7.87%)
National and Regional Banks - Used Cars 4.98%
(-0.98%)
4.96%
(-1.30%)
5.12%
(-1.16%)
4.98%
(-2.04%)
5.02%
(-2.84%)
5.03%
(-4.65%)
5.18%
(-5.90%)
Credit Unions – New Cars 2.39%
(-3.58%)
2.41%
(-4.24%)
2.44%
(9.25%)
2.47%
(N/A)
2.48%
(N/A)
2.51%
(N/A)
2.24%
(N/A)
Credit Union – Used Cars 2.66%
(-10.38%)
2.68%
(-9.94%)
2.93%
(15.35%)
2.95%
(N/A)
2.96%
(N/A)
2.98%
(N/A)
2.54%
(N/A)
Community and Small Banks – New Cars 3.71%
(-7.27%)
3.80%
(-4.82%)
3.96%
(-12.14%)
3.96%
(N/A)
4.00%
(N/A)
4.00%
(N/A)
4.50%
(N/A)
Community and Small Banks – Used Cars 4.55%
(-7.48%)
4.51%
(-6.86%)
4.90%
(-2.21%)
4.88%
(N/A)
4.92%
(N/A)
4.84%
(N/A)
5.01%
(N/A)
Car Manufacturers – New Car Financing 1.58%
(N/A)
2.09%
(N/A)
1.92%
(-21.89%)
N/A
(N/A)
N/A
(N/A)
N/A
(N/A)
2.46%
(N/A)
Car Manufacturers – Leasing 4.92%
(N/A)
4.93%
(N/A)
5.73%
(31.84%)
N/A
(N/A)
N/A
(N/A)
N/A
(N/A)
4.35%
(N/A)

Note: Above data is based on a 36-month term.

Historical Financing Offers by Car Manufacturer

Car Manufacturer Financing APR Q2 2015 Lease APR (inferred interest rate) Q2 2015 Financing APR Q1 2015 Lease APR (inferred interest rate) Q1 2015 Financing APR Q4 2014 Lease APR (inferred interest rate) Q4 2014 Financing APR Q4 2013 Lease APR (inferred interest rate) Q4 2013
Nissan 0.00% 4.57% 0.00% 0.94% 0.00% 4.74% 0.00% 2.04%
Toyota 0.00% 2.87% 0.00% 4.39% 1.90% 5.66% 3.38% 4.42%
Mazda 3.99% 9.21% 2.24% 5.75% 0.90% 6.36% 0.90% 3.23%
Honda 0.90% 4.77% 0.90% 5.67% 0.90% 3.67% 0.90% 6.25%
Chrysler 1.90% 9.15% 0.00% 4.55% 1.98% 8.28% 3.64% 4.80%
Lexus N/A N/A N/A N/A N/A N/A 2.90% 2.17%
Volvo 1.69% 2.65% 1.90% 2.57% 1.90% 7.23% N/A N/A
Kia 0.00% 7.54% 1.90% 4.36% 0.00% 5.27% 0.90% 6.01%
Ford 0.00% 2.81% 5.90% 6.95% 3.94% 4.71% 4.90% 2.38%
BMW 0.90% 3.35% 3.12% 6.67% 3.12% 2.26% 2.99% 4.67%
Volkswagen 0.00% 3.89% 2.90% 3.97% 2.90% 5.68% 3.90% 2.51%
Infiniti 1.90% 4.14% 2.90% 2.87% 2.49% 4.68% 2.99% 5.64%
Audi 2.90% 2.73% 2.29% 5.23% 2.90% 6.41% 1.90% 4.34%
Chevrolet 2.99% 5.28% 2.90% 3.27% 1.90% 1.32% 2.90% 1.15%
Subaru 1.49% 3.81% 1.49% 4.37% 2.99% 8.01% 0.00% 2.50%
Buik N/A N/A N/A N/A 1.85% 4.13% 1.90% 3.49%
Mercedes N/A N/A 2.99% 8.11% 2.99% 9.28% 3.90% 5.43%
Mini 1.90% 6.60% 0.90% 4.27% 1.90% 7.89% N/A N/A
Cadillac N/A N/A N/A N/A N/A N/A N/A N/A
Hyundai 2.59% 3.62% 2.90% 7.42% 2.90% 6.37% 0.00% 4.73%
Dodge 0.00% 10.86% 1.90% 7.74% 1.99% 10.64% 3.90% 6.78%
Acura 1.90% 3.84% 0.90% 3.20% 0.90% 4.53% 0.90% 5.08%
Mitsubishi 2.99% 3.50% N/A N/A 0.00% 3.31% N/A N/A
Jaguar 2.90% 6.87% 1.90% 5.14% N/A N/A N/A N/A
Fiat 3.90% 3.12% 3.90% 6.05% N/A N/A 4.90% 6.08%
Scion N/A N/A N/A N/A N/A N/A 3.95% 7.59%
Average 1.58% 4.92% 2.09% 4.93% 1.92% 5.73% 2.46% 4.35%

Historical Manufacturers Transparency Score

Manufacturer Transp. Score Q2 2015 Transp. Score Q1 2015 Transp. Score Q4 2014
Mazda 6 6 6
Infiniti 6 6 6
Mini 6 6 6
BMW 6 6 3
Acura 6 6 3
Jaguar 6 6 N/A
Honda 6 3 3
Volkswagen 6 3 3
Kia 6 3 3
Toyota 3 3 3
Nissan 3 3 3
Ford 3 3 3
Dodge 3 3 3
Audi 3 3 3
Volvo 3 3 3
Fiat 3 3 N/A
Mitsubishi 3 N/A 3
Cadillac 3 N/A N/A
Chevrolet 1 1 3
Chrysler 1 1 3
Hyundai 1 1 1
Subaru 1 1 1

List of cars used to calculate the Lease APR (inferred interest rate) by quarter:

Car Manufacturer Car Model Q2 2015 Car Model Q1 2015 Car Model Q4 2014 Car Model Q4 2013
Honda 2015 Honda Accord Sedan LX Automatic
2015 Honda Accord Sedan LX CVT
($21,591)
2015 Honda Accord Sedan LX Automatic
2015 Honda Accord Sedan LX CVT
($21,160)
2015 Honda Accord Sedan LX Automatic
2015 Honda Accord Sedan LX Automatic
($21,014)
2014 Civic Coupe LX
2014 Civic Coupe LX
($17,600)
Toyota 2015 Toyota Camry SE Sedan Automatic
2015 Toyota Camry SE Sedan Automatic
($21,888)
2015 Toyota Camry SE Sedan Automatic
2015 Toyota Camry SE Sedan Automatic
($24,088)
2015 Toyota Camry SE Sedan Automatic
2015 Toyota Camry SE Sedan Automatic
($22,665)
2014 Toyota Camry L
2014 Toyota Camry L
($22,988)
Volkswagen 2015 Volkswagen Jetta Sedan S Automatic
2015 Volkswagen Jetta Sedan S Automatic
($19,269)
2015 Volkswagen Jetta Sedan S Automatic
2015 Volkswagen Jetta Sedan S Automatic
($16,038)
2015 Volkswagen Jetta Sedan S Automatic
2015 Volkswagen Jetta Sedan S Automatic
($17,995)
2014 VW Jetta S
2014 Volkswagen Jetta Sedan S
($14,999)
Chevrolet 2015 Chevrolet Cruze Sedan LS Manual
2015 Chevrolet Cruze Sedan LS
($17,605)
2015 Chevrolet Cruze Sedan LS Manual
2015 Chevrolet Cruze Sedan LS Manual
($17,858)
2015 Chevrolet Cruze Sedan LS Manual
2015 Chevrolet Cruze Sedan LS Manual
($17,950)
2014 Chevy Cruze LS
2014 Chevrolet Cruze LS
($17,438)
BMW 2015 BMW 3 Series -320i Sedan
2015 BMW 3 Series -320i Sedan
($31,445)
2015 BMW 3 Series -320i Sedan
2015 BMW 3 Series -320i Sedan
($32,950)
2015 BMW 3 Series -320i Sedan
2015 BMW 3 Series -320i Sedan
($31,940)
2014 BMW 320i Sedan
2014 BMW 320i Sedan
($34,500)
Nissan 2015 Nissan Altima 2.5 S
2015 Nissan Altima 2.5 S
($22,175)
2015 Nissan Altima 2.5 S
2015 Nissan Altima 2.5 S
($22,995)
2015 Nissan Altima 2.5 S
2015 Nissan Altima 2.5 S
($19,848)
2014 Nissan Altima 4dr Sedan I4 2.5 S
2014 Nissan Altima 4dr Sedan I4 2.5 S
($21,500)
Hyundai 2015 Hyundai Elantra SE Manual
2015 Hyundai Elantra SE
($18,000)
2015 Hyundai Elantra SE Manual
2015 Hyundai Elantra SE Manual
($15,794)
2015 Hyundai Elantra SE Manual
2015 Hyundai Elantra SE Manual
($17,055)
2014 Hyundai Sonata SE 2.0T
2014 Hyundai Sonata SE 2.0T
($24,010)
Kia 2015 Kia Optima LX
2015 Kia Optima LX
($18,390)
2015 Kia Optima LX
2015 Kia Optima LX
($19,485)
2015 Kia Optima LX
2015 Kia Optima LX
($19,208)
2014 Kia Soul Base (A6) 4dr H
2014 Kia Soul Base (A6) 4dr H
($16,236)
Chrysler 2015 Chrysler 200 Limited Sedan
2015 Chrysler 200 Limited Sedan
($20,460)
2015 Chrysler 200 Limited Sedan
2015 Chrysler 200 Limited Sedan
($22,220)
N/A 2014 Chrysler 200
2014 Chrysler 200
($22,800)
Mazda 2015 Mazda3 4-Door i SV
2015 Mazda3 4-Door i SV
($17,115)
2015 Mazda3 4-Door i SV
2015 Mazda3 4-Door i SV
($18,226)
2015 Mazda3 4-Door i SV
2015 Mazda3 4-Door i SV
($17,040)
2014 Mazda 3 Sedan
2014 Mazda 3 Sedan
($20,599)
Acura 2015 Acura ILX 5-Speed Automatic
2015 Acura ILX 5-Speed Automatic
($25,995)
2015 Acura ILX 5-Speed Automatic
2015 Acura ILX 5-Speed Automatic
($23,987)
2015 Acura ILX 5-Speed Automatic
2015 Acura ILX 5-Speed Automatic
($22,512)
2014 Acura TL
2014 Acura TL
($36,960)
Subaru 2015 Subaru Outback 2.5i
2015 Subaru Outback 2.5i
($25,278)
2015 Subaru Outback 2.5i
2015 Subaru Outback 2.5i
($27,802)
2015 Subaru Outback 2.5i
2015 Subaru Outback 2.5i
($22,500)
2014 Subaru Outback
2014 Subaru Outback
($22,998)
Ford 2015 Ford Fusion SE
2015 Ford Fusion SE
($23,370)
2015 Ford Fusion SE
2015 Ford Fusion SE
($20,156)
2015 Ford Fusion SE
2015 Ford Fusion SE
($22,474)
2014 Ford Fusion
2014 Ford Fusion
($20,697)
Dodge 2014 Dodge Charger SE
2015 Dodge Charger SE
($26,900)
2014 Dodge Charger SE
2014 Dodge Charger SE
($26,453)
2014 Dodge Charger SE
2014 Dodge Charger SE
($25,020)
2014 Dodge Charger
2014 Dodge Charger
($27,015)
Audi 2015 Audi A4 2.0T FWD Multitronic
2015 Audi A4 2.0T FWD
($36,000)
2015 Audi A4 2.0T FWD Multitronic
2015 Audi A4 2.0T FWD Multitronic
($36,000)
2015 Audi A4 2.0T FWD Multitronic
2015 Audi A4 2.0T FWD Multitronic
($32,982)
2014 Audi A4
2014 Audi A4
($35,253)
Infiniti 2014 Infiniti Q50 3.7
2016 Infiniti Q50 3.7
($39,545)
2014 Infiniti Q50 3.7
2014 Infiniti Q50 3.7
($34,680)
2014 Infiniti Q50 3.7
2014 Infiniti Q50 3.7
($36,334)
2013 Infiniti G37
2013 Infiniti G37
($33,835)
Mini Cooper 2015 Mini Cooper Hardtop
2015 Mini Cooper Hardtop
($18,921)
2015 Mini Cooper Hardtop
2015 Mini Cooper Hardtop
($21,000)
2015 Mini Cooper Hardtop
2015 Mini Cooper Hardtop
($23,550)
N/A
Volvo  2015 Volvo S60 T5 Drive-E FWD
2015 Volvo S60 T5 Drive-E
($33,750)
 2015 Volvo S60 T5 Drive-E FWD
2015 Volvo S60 T5 Drive-E
($37,397)
 2015 Volvo S60 T5 Drive-E FWD
2015 Volvo S60 T5 Drive-E FWD
($33,163)
N/A
Fiat Fiat 500 Pop
2015 Fiat 500 POP
($18,676)
Fiat 500 Pop
2015 Fiat 500 POP
($17,495)
N/A 2014 Fiat 500
2014 Fiat 500
($14,495)
Jaguar Jaguar
2015 Jaguar XF 2.0T Premium
($49,974)
Jaguar
2015 Jaguar XF 2.0T Premium
($47,625)
N/A N/A
mitsubishi-logo 2015 Mitsubishi Lancer GT
2015 Mitsubishi Lancer GT
($17,320)
N/A 2015 Mitsubishi Lancer ES 5MT
2015 Mitsubishi Lancer ES 5MT
($20,905)
N/A
Mercedes N/A 2015 Mercedes-Benz C-Class Sedan
2015 Mercedes-Benz E250 Blue TEC Sedan
($55,100)
2015 Mercedes-Benz C-Class Sedan
2015 Mercedes-Benz E250 Blue TEC Sedan
($53,835)
2014 Mercedes-Benz C-Class Sedan
2014 Mercedes-Benz C-Class Sedan
($39,286)
Cadillac-logo 2015 Cadillac ATS Sedan RWD 2.5L Standard
2015 Cadillac ATS Sedan RWD 2.5L Standard
($35,018)
N/A N/A N/A
Buick N/A N/A 2015 Buick LaCrosse
2015 Buick LaCrosse
($29,665)
2014 Buick LaCrosse
2014 Buick LaCrosse
($33,409)
Lexus N/A N/A N/A 2014 Lexus ES 300
2014 Lexus ES 300
($42,957)
Scion N/A N/A N/A 2014 Scion tC
2014 Scion tC
($20,909)

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John Kiernan is Senior Writer & Editor at Evolution Finance. He graduated from the University of Maryland with a BA in Journalism, a minor in Sport Commerce & Culture,…
1591 Wallet Points

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