Average automobile finance rates in the U.S. dropped to the lowest levels since at least 2002 in March, according to automotive information aggregator Edmunds.com, with embattled Toyota heading the list with the lowest average finance rate of 1.9 percent.
The drop in car loan rates was due to sizable incentives offered by automakers in March. Toyota led the pack with March offers that included subsidized leases and zero-percent financing over five years. The Toyota offers have been extended until May 3 and are designed to help the automaker boost sales after it recalled 8.5 million vehicles worldwide.
Mazda came in second with an auto loan rate of 2.5 percent and Mercury was third at 3.3 percent. Kia had the highest average car loan interest rate in March at 7.1 percent.
“Low interest financing is compelling for consumers because those who qualify often enjoy greater savings than they would get from a cash-back offer,” Jessica Caldwell, senior analyst for Edmunds.com, said in a statement. “Low APR offers are also better for automakers, because they are less damaging to brand image and residual values.”