Japan automobile loan interest rates rise amid high vehicle prices

Automobile manufacturers in Japan, including Honda and Mazda, are raising interest rates on car loans, creating a financial burden for consumers already facing rising vehicle prices. Honda’s financial subsidiary increased rates by 0.4 percent in October, while Mazda has implemented multiple rate revisions. Other companies, such as Nissan and Suzuki, have also raised rates for various loan types, including residual value credit.

This trend coincides with a significant increase in new car prices. According to the Ministry of Internal Affairs and Communications, the price of ordinary passenger cars has risen by 24 percent over the last decade, reaching an average of approximately 3.71 million yen in 2025. This rise is attributed to inflation, enhanced safety features, and stricter fuel efficiency regulations.

For consumers looking to minimize upfront costs, options like car leasing and personal auto loans offer different financial structures. Car leasing typically bundles vehicle costs, taxes, and maintenance into a single monthly fee, which can assist with household budgeting. In contrast, personal auto loans may offer lower monthly payments but require separate payments for taxes and inspections. While leasing helps preserve savings, loans allow for continued ownership after the debt is settled.