Across showrooms and dealer websites, car shoppers are running smack into a new kind of sticker shock. It is not just the price of the vehicle, it is the financing, with interest charges so steep that some buyers are calling the terms predatory and saying, flat out, that what they are being offered “should be criminal.” Their frustration is colliding with a broader affordability crunch that has turned a basic necessity, getting to work or school, into a high‑risk financial decision.
Behind those angry comments is a simple reality: borrowing for a car has rarely felt this punishing. Even as headlines talk about cooling inflation and rate cuts, many households are being quoted double‑digit annual percentage rates, longer loan terms, and higher monthly payments than they expected. To understand why, it helps to look at how policy decisions, market forces, and dealership practices are combining to squeeze buyers from every side.
“This should be CRIMINAL”: anger from the showroom floor
The rawest language is coming from people who feel trapped by the fine print. In one public comment to a housing regulator, a consumer wrote in all caps that current costs “should be CRIMINAL. It should NOT be allowed. My free advice: STOP IT BEFORE IT STOPS YOUR RE-ELECTION CHANCES! THE PEOPL…,” tying their outrage over borrowing costs directly to political consequences and using the words NOT, STOP, BEFORE, STOPS and YOUR to hammer the point. The complaint was not limited to mortgages, it reflected a broader sense that everyday credit, including car loans, has crossed a moral line.
That same phrase, “this should be criminal,” shows up in a dealership review from Clayton, North Carolina, where a buyer said they were charged a higher interest rate than what the car was sold for and left a scathing Rating on the store’s page. The reviewer, posting on a site that also features Research and News for shoppers, suggested the financing terms felt deceptive enough to warrant legal scrutiny. When customers are invoking criminality in both regulatory filings and retail reviews, it signals not just disappointment but a breakdown of trust in how auto lending is being priced and sold.
High rates, high prices, and a stubborn affordability crunch
Part of that distrust stems from the mismatch between the economic story people hear and the numbers they see on their loan offers. Inflation and its impacts have eased from their peak but have not disappeared, and analysts warn that elevated price pressures are likely to linger, which means high car loan interest rates are also likely to stick around. As one breakdown of Inflation and borrowing explains, lenders look to a benchmark rate when setting what they charge, then layer on margins that can vary widely by credit score, so even modest shifts in policy can translate into painful jumps in monthly payments.
At the same time, the vehicles themselves are not getting cheaper. Industry forecasters say high prices will continue to affect new car sales in 2026, with Tariff-related price hikes still a risk as automakers run through existing inventories and face higher costs on imported components. That combination of elevated sticker prices and elevated rates has created what one analyst bluntly calls an affordability crisis, where even buyers with steady incomes are being pushed toward smaller vehicles, older models, or simply hanging on to what they already own.
Why car interest rates are so high, even after Fed cuts
For shoppers, one of the most confusing pieces is the gap between headlines about rate cuts and the reality in the finance office. The Federal Reserve did reduce borrowing costs several times in the back half of 2025, and The Federal Reserve’s moves helped stop the upward spiral in auto loan rates that had been building earlier. Yet as one consumer advocate notes in a look at car buying in, the experience on the ground still feels risky, because prices remain high and lenders have not rushed to pass along every bit of relief.
Part of the explanation lies in how auto loans are structured. Key Decisions by the Federal Reserve to increase the benchmark rate do not directly set car loan terms, but they influence the broader cost of funds for banks and finance companies. By the time those benchmark shifts filter through to dealership offers, lenders have added their own cushions for risk, profit, and overhead. Analysts who track why Car interest rates are so high point to persistent inflation, aggressive monetary tightening in 2024, and rising default concerns as reasons that car interest rates are high in 2024 and into 2025, especially for buyers relying on financing rather than cash.
How lenders decide what you pay
Even within this tough environment, not everyone is being quoted the same painful number. The average auto loan interest rate sits at 7.01% for a 60-month new car loan, according to one national snapshot, but that figure hides a wide spread between borrowers. Data on Average car loan interest rates by credit score show that so‑called superprime borrowers with scores from 781 to 850 pay far less than those in subprime tiers, and that the gap is even wider for used cars, where risk of default is higher and resale values are less predictable.
Behind those spreads are familiar underwriting formulas. Guides to the Factors That Impact emphasize that Credit Score is one of the most significant drivers, but they also highlight Your income, debt load, loan term, and down payment. Dealerships and banks are also responding to what one analysis of How Interest Rates calls the rising cost of living, which has made it harder for households to absorb surprises and has pushed lenders to scrutinize applications more closely. Various factors, from the loan amount to the age of the vehicle, can nudge a buyer into a higher bracket, which is why two people shopping for the same 2026 Toyota RAV4 can walk away with very different monthly bills.
Stretching loans longer, and the hidden cost of “affordable” payments
Faced with those higher rates, many buyers are not walking away, they are stretching out their loans. Industry research on High interest rates notes that as interest rates for auto loans have climbed, monthly payments have risen and many buyers have extended the duration of their loan, lengthening ownership cycles of existing vehicles. A separate analysis of Car Buyers Are explains that this strategy can cost more than it seems, because interest keeps accruing over a longer period and drivers are more likely to be “upside down,” owing more than the car is worth if they need to sell or trade in early.
The trend is especially visible in the surge of 84‑month contracts. One recent example looks at a buyer putting 20 percent down on a 2026 RAV4, or $6,380, and needing an auto loan of at least $25,520 to cover the rest of the purchase. The breakdown of why 84-month car loans are surging shows how stretching payments over seven years can make a high‑priced SUV look manageable on paper, but leaves the owner paying far more in total interest and potentially stuck in the loan long after the new‑car smell has faded. For used car shoppers, the picture is similar: a review of Impact of Rising on used car financing warns that as rates climb, Car Financing Dealerships may see sales decline because buyers grow more hesitant to take on long, expensive loans, and some shoppers with weaker credit scores struggle to obtain financing at all.
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