Fed Rate Hike Sends Car Loan Costs Soaring

The Federal Reserve has increased its benchmark interest rate to 4.00% in a quarter-point move, marking its first hike in over two years.

This decision is expected to push car loan costs higher for both buyers and automakers financing their operations, according to the source.

New Federal Reserve Chairman Kevin Warsh raised rates despite President Donald Trump's warning that a rate increase might prompt him to scale back commerce with countries running trade deficits.

Average transaction prices have already risen significantly, from $34,000 in early 2015 to over $50,000 by the time of Trump's inauguration, representing a roughly 47% jump across the decade, Kelley Blue Book reports.