US Car Loan Interest Rates Fall From Mid-2024 Peak
Interest rates for car loans in the United States have been decreasing since mid-2024. This marks the end of a period where interest rates rose rapidly from 3.85% in December 2021 to 7.89% in July 2024. As of July 2026, the interest rate stood at 6.97%. The Federal Reserve's interest rate is one of the main causes of rising or falling loan interest rates. If inflation stays under control, the Fed will start cutting interest rates, which would lead to a decrease in car loan costs.
The majority of new vehicles purchased in the US in 2025 were financed through car loans. While it's less common for used vehicles, over a third of them were also purchased using loans. The car financing business is significant in the US due to its high sales of both new and used vehicles.