Fed rate hike pressures car financing and dealership margins

The Federal Reserve’s interest-rate increase is making it more expensive to finance a vehicle in the United States. For buyers, that means higher monthly payments on loans and leases, which can slow demand for both new and used cars.

Dealership F&I departments are also feeling the pressure, as financing and insurance products play a key role in profits. With credit costs rising, dealers need clearer offers, targeted deals and a sharper focus on payment affordability.