The average auto loan rate is 4.33% for new cars and 8.62% for used cars, but shop around to get the best deal.
Average car loan interest rates.
| Credit score |
Average APR, new car |
Average APR, used car |
| Prime: 661-780. |
4.03%. |
5.53%. |
| Nonprime: 601-660. |
6.57%. |
10.33%. |
| Subprime: 501-600. |
9.75%. |
16.85%. |
How can I get the lowest interest rate on a car?
Other Ways to Reduce Your Auto Loan Interest Rate
- Make a larger down payment. The more you borrow from a lender, the more it stands to lose if you default on your payments.
- Reduce the sales price. Again, the less money you borrow, the less of a risk you pose to lenders.
- Opt for a shorter repayment term.
- Get a cosigner.
What is the lowest APR on a used car?
The best used car loan rates start at 2.49% while the best new car loan rate is 2.09%. Shorter financing terms of 24 to 36 months generally come with the lowest interest rates.
How can I get a better interest rate on a used car?
- 1) Shop in the Right Places for Used Auto Loans.
- 2) Get an Auto Loan Pre-Approval.
- 3) Learn How Credit Scores Affect Interest Rates.
- 4) Manage Your Loan-to-Value Ratio (LTV)
- 5) Get the Shortest Loan You Can Afford.
- 6) Don’t Focus on the Monthly Payment.
- 7) Know How the Type of Car You Buy Can Change Your Interest Rate.
What is a good interest rate for a used car? – Related Questions
What is the smartest way to finance a car?
How to finance a car the smart way
- Check your credit score before you go to the dealership.
- If your credit score isn’t perfect, get financing quotes before you go.
- Keep the term as short as you can afford.
- Put 20% down.
- Pay for sales tax, fees, and “extras” with cash.
- Don’t fall for the gap insurance speech.
What APR is too high for a car?
A high APR (“annual percentage rate”) car loan is one that charges higher-than-average interest rates. The legal limit for car loans is around 16% APR, but you will find lenders that get away with charging rates of 25% or more.
Can you negotiate the interest rate on a used car?
Yes, just like the price of the vehicle, the interest rate is negotiable. The first rate for the loan the dealer offers you may not be the lowest rate you qualify for. With dealer-arranged financing, the dealer collects information from you and forwards that information to one or more prospective auto lenders.
Can I trade my car in for a better interest rate?
trading in a car. The refinancing process allows you to find a new lender that will either offer you a lower interest rate or a longer loan term. Both will lower your monthly payment and potentially make your car loan more affordable each month. However, refinancing to a longer loan term will mean you pay more interest
Can you negotiate the interest rate on your vehicle finance?
You are able to choose the finance offer and interest rate that suits your budget. It is also very important to understand that it is the banks and not the dealership that ultimately decide on your interest rate.
What is a good interest rate for a used car for 72 months?
Average Interest Rates by Term Length
| Auto Loan Term |
Average Interest Rate |
| 36 Month |
4.21% |
| 48 Month |
4.31% |
| 60 Month |
4.37% |
| 72 Month |
4.45% |
What is a good monthly payment for a used car?
The average monthly car payment for new cars is $667. The average monthly car payment for used cars is $515. 38.22 percent of consumers financed new vehicles in the second quarter of 2022. 61.78 percent of consumers financed used vehicles in the second quarter of 2022.
Why are used car interest rates so high?
Used car loans typically have higher interest rates than new car financing because there’s more uncertainty as to the value of the car, and lenders can demonstrate that used car borrowers default more frequently on their auto loans, regardless of their credit.
Can you finance a 10 year old car for 72 months?
A lender sets the auto loan term length for a used car, which varies from company to company. Until recently, used car loans were generally limited to 72 months. However, today borrowers can secure used car loans for 84 months or more due to the rising need for vehicles.
What credit score do you need to get a 84-month car loan?
There is no set credit score you need to get an auto loan. If you have a credit score above 660, you will likely qualify for an auto loan at a rate below 10% APR. If you have bad credit or no credit, you could still qualify for a car loan, but you should expect to pay more.
Is it smart to get a 72-month car loan?
Is a 72-month car loan worth it? Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn’t an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go.
Can you pay off a 72-month car loan early?
Can you pay off a 72-month car loan early? Yes, you can pay off a 72- or 84-month auto loan early. Since these are long repayment terms, you could save considerable money by covering the interest related to a shorter period of time.