If you’ve been shopping for a new car and haven’t seen many offers for 0% financing, you’re right. As a percentage of all car loans, 0% financing is expected to drop from 11.4% of all loans made last year to 7.4% when the data for March are tallied.

That decrease is driving up the average cost of a new car loan from 5.0% last March to 5.7% this year. In January the average interest rate on a new car loan was 5.0% and it rose to 5.2% in March.

The data were reported Tuesday by auto industry analysts at Edmunds.com.

Edmunds.com’s executive director of industry analysis, Jessica Caldwell, said:

Some of the largest volume brands like Chevrolet, Ford, Nissan and Toyota are demonstrating the largest drop in zero-percent loans year over year. This goes to show how the cost of lending has become increasingly more pricey, and zero-percent financing, while still a desirable incentive, no longer adds the same wow factor for consumers like it used to.

A quick look at incentives on a 2018 Chevy Silverado 1500 revealed several cashback offers and just one 0% financing offer (60 months plus $1,000 cash back). The “wow” factor today appears to be offers of cash allowances, price reductions and discounts on option packages that total more than $10,000 on some hot sellers like the Silverado.

Carmakers and dealers can’t make up all the difference on higher interest loans, but margins on popular vehicles like pickups and sport utility vehicles are high enough that a little less on each vehicle sold is more than made up in volume. How long new car buyers will favor the cash deals over the zero-interest deals depends on how long it takes for the 0%-rate to be novel again.

The analysts also noted a drop in the percentage of loans made in the 2% to 4% interest rate range and an increase in loans costs 4% to 7%. The number of 2% to 4% loans accounted for 8.9% of the market, compared to 14.1% a year ago, and the percentage of 4% to 7% loans accounted for 34.5% of car loans compared to 27.6% last March. Edmunds concludes that buyers are continuing to land in higher brackets than they previously would have.

According to Edmunds, the average term for a new car loan last month was 69.5 months, nearly six years compared to 69.0 months a year ago and 65.7 months five years ago. The average monthly payment has risen from $461 in 2013 to $527 this year, and the amount financed has jumped from $26,533 five years ago to $31,020. Down payments also rose: from $3,584 in 2013 to $3,962 this year.

The cost of borrowing for a used car also is rising. The average term for a used car loan has risen from 63.8 months in 2013 to 67.2 months. Monthly payments have increased from $361 to $393, and the amount financed has risen from $18,867 to $21,202. The annual percentage rate on a used car loan has also gone up, from 8.4% in 2013 to 8.7%, and down payments are up from $2,364 to $2,625.

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