Car Insurance and Financing

• New agency offers auto, home, motorcycle, and RV insurance with access to top providers

• Exclusive features include OEM parts coverage for Honda and Acura vehicles

• Partnership with VIU by HUB enables fast, expert guidance in all 50 states

American Honda Motor Co. is launching Honda Insurance Solutions, a fully licensed insurance agency offering coverage options for Acura and Honda customers nationwide. The new agency provides a wide array of insurance services—from auto and home to motorcycles, boats, and recreational vehicles—all available through its new online platform, hondainsurancesolutions.com.

Powered by VIU by HUB, an omnichannel insurance brokerage, Honda Insurance Solutions aims to streamline the insurance buying process, enabling customers to compare prices from top carriers and receive transparent, expert advice from licensed agents in real time.

“Insurance is a key touchpoint in the vehicle ownership journey,” said Petar Vucurevic, President of American Honda Insurance Solutions, LLC. “We aim to deliver a superior experience tailored to the unique needs of each customer while promoting safer driving and peace of mind on the road.”

Features tailored to Honda and Acura owners

Among the features of Honda Insurance Solutions is optional OEM parts coverage, which ensures that insurance claim repairs for Honda and Acura vehicles use genuine parts. This offering helps preserve vehicle value.

Licensed in all 50 states and D.C., the service allows consumers to shop for a wide range of policies, including auto, renters, condo, pet, boat, and more—all backed by American Honda Finance Corporation.

Strategic expansion of Honda's digital services

The insurance initiative is part of a broader digital strategy by Honda to enhance the customer journey. Future plans include integrating insurance directly into digital vehicle sales platforms and rolling out new products that combine safety, convenience, and value.

“This is just the beginning of our vision,” added Vucurevic. “We’re creating an insurance experience integrated throughout the Acura and Honda digital customer journeys.”

With this new venture, Honda joins a growing number of automakers expanding beyond traditional manufacturing to include financial and digital services aimed at improving lifetime customer engagement.

Visit hondainsurancesolutions.com for quotes, coverage options, and additional information.

Two new reports from automotive data company Edmunds show just what new car buyers are up against these days. Not only are prices near record highs, but so are monthly payments, thanks to rising interest rates.

"High prices and rising interest rates are dealing consumers a one-two punch by catapulting monthly payments into a new realm," said Jessica Caldwell, Edmunds’ executive director of Insights. "With new vehicle purchases, automaker subsidies offer a bit of relief, but even those are far less generous than before. Consumers heading into the car market may be aware of high prices but also need to brace themselves for a different experience in the F&I office."

Edmunds reports the average annual percentage rate (APR) on new financed vehicles in the third quarter of 2022 climbed to 5.7%, the highest rate since the third quarter of 2019.

At the same time, the average auto loan for new cars and trucks hit an all-time record high in the third quarter, rising to $41,347. That compares to $40,602 in the previous quarter and $38,315 in the third quarter of 2021.

Jaw-dropping payments

That makes for some jaw-dropping monthly car payments. Edmunds estimates that 14.3% of consumers who financed a new vehicle purchase in the third quarter of this year agreed to a monthly payment of $1,000 or more. That’s the highest level that Edmunds has on record.

The percentage is even greater for consumers purchasing an electric vehicle (EV). Edmunds says 26% of EV buyers are driving away with a monthly payment over $1,000.

For car buyers, there are only two ways to get a lower monthly payment. Put down more cash or select a less expensive vehicle. Despite worrisome macroeconomic conditions, Caldwell says consumers have been less inclined to spend less.

"Ongoing inventory shortages are partly to blame, but this trend is also a reflection of consumer preferences,” she said. “In the past decade, we've seen Americans embrace a bigger-is-better mindset by gravitating toward larger vehicles with more creature comforts, technology-heavy features, and more recently, electrified powertrains — but that all comes with added cost. Rising interest rates combined with higher prices has sent monthly payments soaring to new heights."

New car prices are still near record highs and interest rates continue to rise, making the purchase of a new car increasingly expensive. But it turns out there are five lease deals this month with monthly payments at or below $199 a month.

Automotive publisher Edmunds dug up the deals but notes these vehicles are not the most popular with consumers, which is why they are priced the way they are. Some require large initial payments, which must be considered along with the low monthly payment.

Let’s start with two Buick Encore models – the Encore and the Encore GX. They both list for about the same – just over $27,000. However, the Edmunds editors favor the GX over the Encore for its “sprightly acceleration, competent handling, and a robust list of tech features.”

Both small SUVs have $199 monthly payments but aren’t the values they might first appear. Both are 24-month leases and require upfront payments of over $5,600. When factored into the total cost, that $199 monthly payment is more like $432.

The 2022 Chevrolet Trax is also a 24-month lease but has a slightly lower initial payment – $4,319. The downside? The Edmunds editors say the Trax is small and practical, “but it's also slow and it doesn't have the best ride.”

36-month leases are more affordable

The 2022 Hyundai Venue may be the most attractive lease deal available in September. It's Hyundai's smallest SUV and the Edmunds reviewers say the Venue, “packs a lot into a very compact package.”

The MSRP is $20,295 but the lease carries a monthly payment of just $169 a month for 36 months. Even when adding in the $3,200 due at signing, the monthly cost is only $257.

The last vehicle on the list is the only sedan, the Hyundai Elantra. With an MSRP of just over $21,000 the Elantra lease is for 36 months and a monthly payment of $199 – $287 when the $3,200 upfront cost is considered.

The Elantra choice is a popular one with the Edmunds editors, who say that it “stands out with its high fuel economy, impressive technology and safety features, and roomy cabin.”

Things to consider

All of the lease deals end at the end of the month or early October. Keep in mind that these deals are not available in every state so car shoppers should make sure dealers in their states will honor them. Consumers leasing a vehicle in this environment should be mindful of one other thing.

The “residual” value of the vehicle, what it can be purchased for at the end of the lease, has never been higher because of the current high market value of used cars. Chances are, at the end of the lease the market will be back to normal and the vehicle will be worth less than its residual value.

Anyone leasing a car now should be prepared to turn it back in at the end of the lease, taking good care of it and staying under the mileage limit.

Not only are the prices of new and used cars going up, but so are the monthly payments used to finance them, according to a new report from automotive publisher Edmunds.

Those higher monthly payments are the result of a perfect storm of economic conditions. The cost of the vehicle and the interest rate used to formulate the monthly payment continued to move higher over the last few months.

As a result, Edmunds estimates that the average monthly payment for a new car or truck purchased in the first quarter was $648. That compares to $639 in the first quarter last year and $575 in the first quarter of 2020, just before the pandemic hit.

The monthly payment for the average used vehicle isn’t that much lower. Edmunds estimates that the average monthly payment for used vehicles is expected to break a record, climbing to $538. That's up from $432 in the first quarter of 2021.

Edmunds experts say the record monthly payments are the result of record prices for the cars and trucks themselves. They estimate that the average auto loan was $39,340 for a new vehicle and $30,040 for a used car or truck.

Using those calculations, the average new car loan increased by 12.2% year-over-year, and the average used car loan surged 28.6% higher. Edmunds data suggests that luxury new vehicle lease penetration fell to 32% in March 2022, down from 53% in March 2019.

Inventory is still a problem

The researchers say lower inventories are a massive problem for buyers who are looking for a good deal on a vehicle.

"Shrunken inventory continues to wreak havoc on both the new and used vehicle markets, and shoppers who can actually get their hands on a vehicle are committing to never-before-seen average payments and loan terms," said Jessica Caldwell, Edmunds' executive director of insights.

Edmunds also estimates that the average new car buyer made a down payment of $6,026 in the last quarter, a 27% increase compared to the same period in 2021. It’s the first time that number has crossed $6,000.

“It’s a tough time to have to buy a car,” said Karl Brauer, executive analyst at iSeeCars.com, in a recent ConsumerAffairs interview. “I’m telling  people that if they can wait to replace their car, they should.”

The skyrocketing cost of new and used cars means consumers who finance their purchases are facing ever-higher monthly payments. The Consumer Financial Protection Bureau (CFPB) says that’s a cause for concern.

The CFPB says the problem is greater with used vehicles because the interest rate on a used car loan is typically higher than for a new car. The agency points to data showing that the consumer price index (CPI) for used cars and trucks increased by 40% percent since January 2021, while the CPI for new cars increased by just 12%. 

As car prices continue to rise, the CFPB worries that loan amounts will continue to rise. However, that may not be immediately apparent to consumers since growing loan lengths may make those larger loans seem affordable.

Consumers should shop around

These circumstances make it more important for consumers seeking to finance a used car to shop around for the best terms. Some new players, including fintech firms, can be very competitive with banks and credit unions.

Scottie, of Danville, Va., told us he had a good experience with LoanMart, citing its flexibility.

“Unlike a regular car loan, you can pay towards the principal and get it down quicker than the months they had it set up for,” Scottie wrote in a ConsumerAffairs post. 

‘Average loan size will continue to increase’

According to the CFPB, the danger for consumers is overextending the length of a loan. For example, financing a vehicle for six or seven years will result in a much slower payoff of the amount owed. At some point, the consumer will still owe more than the vehicle is worth – even in today’s hyperinflationary market.

“As a result, we expect that both the total amount of debt and the average loan size will continue to increase and that larger car loans will put increased pressure on some consumers’ budgets for much of the next decade,” the agency said.

Officials note that auto loans are already the third-largest consumer credit market in the U.S. at over $1.4 trillion outstanding. That's double the amount from 10 years ago, and it's expected to grow further. The CFPB has expressed concern that the inflated prices of used cars and trucks could create incentives for lenders to repossess cars more quickly than they would have in the past.

The financial regulating agency said it will closely monitor lender practices to measure how they affect consumers. In particular, it will evaluate lending structures where lenders appear to rely on high interest rates and fees to profit, even when consumers fail.