Rising Treasury Yields Push Auto Loan Rates Higher — SkimNews
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- Treasury yields climbed across the board, with the 30-year reaching 5.446% (highest since 2004), the 10-year hitting 5.15%, and the five-year above 5% — levels not seen since 2006.
- The Federal Reserve raised the federal funds rate by a quarter-point to 3.75%–4.0% last week, with stronger-than-expected economic data fueling expectations of further hikes.
- NADA chief economist Patrick Manzi said auto loan rates typically move with the five- or 10-year Treasury yield, and expects them to keep rising given the recent yield run-up.
- Cox Automotive's Jeremy Robb reported new-vehicle loan rates are up about 20 basis points over the past two months, while used-car rates climbed about 10 basis points.
- Experian data shows Q2 2026 average new-car loan rates were 6.35% with $765 monthly payments; used-car loans averaged 11.2% with $542 monthly payments.
- Edmunds' Joseph Yoon advised shoppers to broaden financing beyond their primary bank, consider alternative brands for promotional captive-lender rates, and get pre-approved before visiting the dealer.
Why it matters: With the 10-year Treasury at 5.15% and the Fed signaling more hikes, auto loan rates face continued upward pressure. Even a single percentage point on a $43,000 six-year new-car loan adds $1,483 in total interest — and used-car buyers, already at 11.2% average rates, absorb the steepest hit.
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