When you’re getting ready to finance a new or used car, knowing the average car loan interest rate received by other recent car buyers is helpful. Having this information, especially for borrowers with a credit score similar to yours, gives you an idea of what rate to expect and a benchmark for comparing loan offers.
The auto loan interest rate you receive is based on several factors — such as your income, credit history and credit score. Your credit score is one of the biggest factors in determining the rate you’ll get, because lenders use it to gauge how likely you are to repay the loan. Generally speaking, the higher your credit score, the lower your car loan interest rate is likely to be.
Did you know...
Car loan interest rates and annual percentage rates, or APRs, aren't the same. Interest rate is the percentage you pay to borrow money. APR includes interest rate plus any fees charged by a lender. When comparing loan offers, make sure you are comparing the APR.
Average car loan interest rates by credit score
Consumer credit reporting company Experian releases average auto loan interest rates in its quarterly Automotive Finance Market report. In the fourth quarter of 2023, the overall average auto loan interest rate was 7.18% for new cars and 11.93% for used cars.
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Source: Experian Information Solutions. |
People with credit scores above 780 have the best shot of getting the lowest interest rates, with credit scores below 501 typically resulting in the highest interest rates.
» Compare lenders' rates to find the best auto loan for you
Are auto loan interest rates rising?
It's worth noting that when the Federal Reserve increases the federal funds rate, auto loan interest rates usually follow. Fed rate hikes that began in 2022 have now pushed car loan interest rates to their highest level in years. Some sources provide average auto loan interest rates updated monthly, so the rates are more recent, but they aren’t broken down by credit score.
In April 2024, automotive site Edmunds.com listed the average car loan interest rate for March 2024 as 7.2% APR for new car loans and 11.9% APR for used car loans. Data company Cox Automotive gave the volume-weighted average rate as 9.81% for new cars and 14.21% for used cars in its 4/16/24 Auto Market Report. Cox Automotive rates are sales-weighted averages based on information from Dealertrack, a software used by auto dealerships.
How to use average car interest rates
When you know your credit score and the average car loan interest rate you might qualify for, you can use NerdWallet’s auto loan calculator to input the rate and estimate the monthly car payment for various loan terms.
Using averages for auto loan interest rates is a helpful tool, but you won’t know your actual interest rate until you apply for a loan and receive lender offers. Your rate can be affected by several factors, including length of the loan term and vehicle age.
To ensure you get the best deal possible, shop rates with multiple lenders and compare. Many lenders offer pre-qualification with a soft credit check, which gives you an idea of the rate you might qualify for without affecting your credit score.
If you’ve already financed a car and your rate is higher than the average rate listed for your credit score, you may be able to refinance for a lower rate — and a lower payment. Pre-qualify to refinance your auto loan with several lenders and get an idea of the rates you'll be offered.
FAQs
Average car loan interest rates by credit score
FICO Score | Average new car rate | Average used car rate |
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661 to 780 (prime) | 7.01% | 9.73% |
601 to 660 (near prime) | 9.60% | 14.12% |
501 to 600 (subprime) | 12.28% | 18.89% |
300 to 500 (deep subprime) | 14.78% | 21.55% |
1 more rowMay 13, 2024
What interest rate can I get with a 800 credit score car loan? ›
Average Car Loan Interest Rates by Credit Score
Credit Score Range | New Car Loan Rates | Used Car Loan Rates |
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781 to 850 | 5.64% | 7.66% |
661 to 780 | 7.01% | 9.73% |
601 to 660 | 9.60% | 14.12% |
501 to 600 | 12.28% | 18.89% |
1 more row
What interest rate can I get with a 750 credit score for a car? ›
Average Auto Loan Rates in March 2024
Credit Score | New Car Loan | Refinance Car Loan |
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750 or higher | 12.77% | 7.89% |
700-749 | 12.65% | 8.98% |
600-699 | 17.84% | 10.09% |
451-599 | 22.56% | 12.76% |
1 more row
What interest rate should I expect on a car loan with a 700 credit score? ›
A credit score of 700 gets you an interest rate of 3% to 6% on car loans for new cars and about 5% to 9% for second-hand cars.
What is a good interest rate for a car for 72 months? ›
What is a good interest rate for a 72-month car loan? An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.
What is a bad APR for a car? ›
Average car loan interest rates by credit score
Credit score | Average APR, new car | Average APR, used car |
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Prime: 661-780. | 7.01%. | 9.73%. |
Nonprime: 601-660. | 9.60%. | 14.12%. |
Subprime: 501-600. | 12.28%. | 18.89%. |
Deep subprime: 300-500. | 14.78%. | 21.55%. |
2 more rowsMay 16, 2024
How rare is an 800 credit score? ›
According to a report by FICO, only 23% of the scorable population has a credit score of 800 or above.
What credit score do I need to buy a $15000 car? ›
The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.
Can you negotiate interest rates on cars? ›
Yes, just like the price of the vehicle, the interest rate is negotiable. Dealers may not offer you the lowest rate that you qualify for.
Is a 750 credit score good enough to buy a car? ›
To get an auto loan without a high interest rate, our research shows you'll want a credit score of 700 or above on the 300- to 850-point scale. That's considered prime credit, and lenders don't have to price much risk into their rates.
Compare Car Loan Rates
Top Auto Loan Lender | Lowest APR | Term Length |
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AutoPay | 4.67%** | 24 to 96 months |
PenFed Credit Union | 5.24% | 36 to 84 months |
Auto Approve | 5.24%** | 12 to 84 months |
Consumers Credit Union | 6.54% | Up to 84 months |
3 more rows
Will car loan rates go down in 2024? ›
McBride shares that while the high-rate environment will persist, rates will ease for most borrowers in 2024. Increased competition between lenders may help drivers secure a good rate. However, he warns, “don't expect auto loan rates to fall enough to offset the increases we've seen over the past couple of years.”
What is a good credit score to get a car? ›
Your credit score is a major factor in whether you'll be approved for a car loan. Some lenders use specialized credit scores, such as a FICO Auto Score. In general, you'll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.
How to get a lower interest rate on a car loan? ›
How to Get a Low Interest Rate on a Car
- Be aware of your credit score. Be aware of what your credit score is and if there are any points that need to be corrected before you apply for a car loan.
- Clean up your score. ...
- Consider Refinance Loans. ...
- Enlist a cosigner. ...
- Consider in-house financing.
Why are auto loan rates so high? ›
The Federal Open Market Committee (FOMC) sets the benchmark rate, which impacts the rates auto lenders set. When the federal funds rate increases, financing a vehicle will likely be more expensive. The Fed has increased the benchmark rate 11 times since the start of 2022.
Is 7% interest on a car loan high? ›
Car Loan APRs by Credit Score
Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used.
What interest rate can I get on a car loan with a 650 credit score? ›
Average auto loan interest rates by credit score
Personal FICO score | Average interest rate for new car loans | Average interest rate for used car loans |
---|
661 to 780 | 7.01% | 9.73% |
601 to 660 | 9.60% | 14.12% |
501 to 600 | 12.28% | 18.89% |
300 to 500 | 14.78% | 21.55% |
1 more rowMar 4, 2024
What is a good credit score for a car loan? ›
Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian. Meanwhile, low-credit borrowers with scores of 600 or lower accounted for only 14% of auto loans.
What interest rate can I get with a 720 credit score? ›
Average online personal loan rates
Borrower credit rating | Score range | Estimated APR |
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Excellent | 720-850. | 12.37%. |
Good | 690-719. | 14.87%. |
Fair | 630-689. | 18.40%. |
Bad | 300-629. | 21.93%. |
May 14, 2024