Although there’s always going to be some wiggle room, the average used car loan interest rates are as follows: Excellent Credit (750 or Higher) – 5.1% APR. Good Credit (700 to 749) – 4.91% APR. Average Credit (600 to 699) – 5.89% APR.
Also know, are used car interest rates higher?
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.
Keeping this in view, is 2.9 percent financing good?
Dealerships will often advertise very good interest rates on new cars: 2.9%, 1.9%, sometimes even 0%. What they leave in the fine print is that these rates are only available to buyers with the best credit—that may mean a FICO score of 750 or better.
Is 5 percent interest rate high for a car?
If you can land an interest rate under 5% for a brand new vehicle, that’s generally considered a good deal. The actual rate you get for a new car, depending on your credit score, could be anywhere around 2.34% to 14.59% on average, according to Experian’s latest data from the second quarter of 2021.
How much money you can save on a car with a better credit score. … The average new car loan amount for superprime drivers is $29,620, according to Experian, so you might qualify for the good (or prime) rate of 5.9% on a $29,620 loan paid over 60 months.
Higher interest rates are another reason to stick with a 60-month loan. The longer the term, the more interest you will pay on the loan, both in terms of the rate itself and the finance charges over time. … Contrast that with a 72-month auto loan. The interest rate would be higher, which is common for longer loans.
A 72-month car loan can make sense in some cases, but it typically only applies if you have good credit. When you have bad credit, a 72-month auto loan can sound appealing due to the lower monthly payment, but, in reality, you’re probably going to pay more than you bargained for.
Poor Credit (300-629): ~27 – 32% Interest Rate. Fair Credit (630-689): ~18 – 22% Interest Rate. Good Credit (690-719): ~14 – 18% Interest Rate. Excellent Credit (720+): ~10 – 14% Interest Rate.
Compare the Best Auto Loan Rates
|PenFed Credit Union Best Overall||0.99%||36 to 84 months|
|LightStream Best Online Auto Loan||2.49%||24 to 84 months|
|Bank of America Best Bank for Auto Loans||2.14%||12 to 75 months|
|Consumers Credit Union Best Credit Union for Auto Loans||2.24%||0 to 84 months|
If your credit score is less than 601, you can expect a rate above 10% for new cars.
|Credit score||Average APR, new car||Average APR, used car|
|Loan term||Average interest rate|
|72-month new car loan||3.96% APR|
People with good credit scores of 700–749 average an interest rate of 5.07% for a new car and 5.32% for a used car.
The reason for the seemingly high rates goes beyond corporate profit or greed: It’s about risk to the lender. … For banks and other card issuers, credit cards are decidedly risky because lots of people pay late or don’t pay at all. So issuers charge high interest rates to compensate for that risk.