Interest Increases Could Cost Auto Industry $22B
Feb. 1, 2022—The auto industry could lose $22 billion if the federal reserve raises interest rates, Jalopnik reported.
The federal reserve cut interest rates to zero during the early onset of the COVID-19 pandemic but has indicated it would likely raise rates a quarter of a percentage point, the report said.
J.D. Power estimates spiking interest rates would lead to a $15 billion loss in used vehicle sales and another $7 billion in losses on new vehicles., according to an NBC News report.
With this rate hike, the industry could sell 150,000 fewer new cars and 500,000 fewer used cars this year.