How to save on auto loans as the federal funds rate changes

The Federal Reserve's federal funds rate influences the cost of auto loans, with fluctuations causing corresponding changes in vehicle financing expenses. In September 2026, the Fed raised the funds rate for the first time since 2023, targeting a rate between 3.75% and 4.00%. Despite multiple rate cuts throughout 2025 and a static rate through 2026, consumers likely won't see lower auto loan rates for some time.

Experts advise shopping around for at least three different loan offers before committing to one deal, as dealer financing often proves more expensive. As the economy grapples with high inflation, refinancing options may offer relief to borrowers, but staying informed about Federal Reserve updates and comparing loan rates remains crucial.