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Car loan rates head for 14-year high in new barrier for buyers

By Craig Trudell | Bloomberg

Just as automakers start making headway sorting out the parts shortages that have constrained production and left dealers with a scarce supply of vehicles to sell, the Federal Reserve is putting up a new obstacle: much costlier car loans.

The average annual percentage rate on new-car loans was 6.3% last month, the highest since April 2019, according to Edmunds. The auto-market researcher’s data show APRs closely track the effective federal funds rate, which suggests financing a new vehicle will be costlier in the coming months than it’s been since early 2009.

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