How The Fed Rate Cut Will Help Ford EVs

By Douglas McIntyre • September 20, 2024

Harrison Haines Pexels

The Federal Reserve cut its rate by half a point. Eventually, this will trickle down to both commercial and consumer loans. Consumers could pay lower interest rates on mortgages, credit cards, and car loans. In particular, this could help weak EV sales.

As the average price of a new car is $45,000 and the average age of a car on the road in the US is, manufacturers have also faced car loan rates as high as 7.8%. For a five—or six-year loan, these can cause payment amounts to surge.

Mustang Mach-E Deal

Ford has lower car rates, likely due to too much inventory. The Ford Mustang Mach-E EV has a 0% APR for 72 months offer. However, a loan for its 2024 Bronco Sport is 5.9% APR over 60 months.

The New York Times reports, “Setting rates is one of the key ways the Fed can try to speed up or cool down the economy, which can include what lenders offer prospective homeowners, car buyers and other consumers.”

August Sales Increase

Ford’s unit sales in the US have been rising, and they were up 13.4% in August to 182,985. However, the company faces a possible strike and a slowdown in EV sales. Lower car loan rates come just in time to restart EV sales.