How the Fed's rate cut will impact auto loans

Published On Sep 19, 2024, 2:00 AM

The article discusses the impact of the Federal Reserve's recent rate cut on auto loans. While the cut aims to improve affordability for car buyers, analysts from Bank of America predict that it will not significantly lower borrowing costs in the near future. They suggest that multiple cuts will be necessary before consumers see any real benefits. Since the Fed started raising rates in 2022, auto loan rates have surged, leading to higher monthly payments. Consumers are unlikely to see material changes in auto affordability until at least 2025, as interest rates for auto loans are delayed in their response to Fed rate cuts.