Elevated Interest Rates Affects Car Demands in 2024

Significant factors affecting auto sales include high vehicle prices and increasing interest rates. As consumer demand declines, The automotive sector finds it hard to elevate car sales in 2024. Despite several efforts from the auto industry, consumers opted for less expensive vehicles or just dropped the idea of buying cars in 2024. Further, it leads to a decline in vehicle demand in the market. Experts say the average interest of 8 percent on car loans makes it more difficult for consumers. They find meeting the elevated interest rates more complex with new vehicles. Moreover, the used car loans strike at 14 percent in 2024. It makes it more difficult for consumers to opt for car loans as affordability becomes a relevant issue.

Experts claim that increasing car loan rates can be combated with specific initiatives in 2024. These solutions include cash back on buying expensive cars, lower interest rates, price cuts on vehicles, and others. However, managing such higher elevated interest rates with these incentives is difficult. This impacts the auto industry heavily as the higher interest rates may affect the purchasing rate in 2024. Therefore, experts aim to find better solutions to solve the interest rate elevations to boost car sales.

                        The graph shows the car affordability index till 2023: