What is a Good Interest Rate for Your Car Loan?

Tiny car with coins and finance paperwork
 

Not all car loans are created equal. In fact, where you apply for automotive financing can have a huge impact on what you’ll wind up paying for your monthly payment and what your interest rate will be. Of course, other factors like your credit score also factor into the picture. Want to learn more about what a good interest rate for a car loan is for your unique situation? We’ve compiled a new and used car APR table below to make finding out easy! Don’t hesitate to contact us with questions, though.

New and Used Car APR

Average Credit Score for New Car Annual Percentage Rate Average Credit Score for Used Car Annual Percentage Rate
781-850 3.17% 781-850 3.8%
661-780 4.03% 661-780 5.48%
601-660 6.79% 601-660 10.1%
501-600 10.98% 501-600 16.27%
300-500 13.76% 300-500 19.32%

How to Get the Best Interest Rate on a Car Loan

Now that you know what a good interest rate is for a car loan given your credit, you may want to improve your odds of getting a lower rate by improving your credit score. If that’s the case, planning ahead will be your ally. Here are some concrete steps you can take to bet a better APR:

  • If you don’t already know it, you’ll need check your credit history and take note of your credit score. The higher the credit score, the lower your interest rate will be. 
  • Use the table above to get a good idea of what your credit score is now and what rates you may be eligible for. Then, take steps to improve your credit over time. Make a plan with a financial advisor for how to repay debts, or get a secured credit card. You can buy a cheap used car in the meantime and then when you’re ready to apply for financing later, you’ll be more likely to get a better APR!
  • Even if you can’t plan ahead and you need a car now, be prepared to negotiate the terms of your loan down. 
  • When negotiating your car loan, don’t forget to think about the bigger picture — the entire deal — and not just the monthly payments or interest rate alone.

As you can see, what a good interest rate on a car loan is depends largely on your credit score. Accordingly, a “good” rate can be anywhere from 3.17% and 13.76%.

What is the Average Interest Rate on a Car Loan?

Some Great Neck and Brooklyn car shoppers wonder what a good interest rate is on a car loan. Math and statistics aficionados, however, may be more interested to know more about what the average interest rate on a car loan is. On average, for a three-year car loan, people pay between 3% to 4.5%

Apply for Financing with City Cadillac 

Get in touch with ourfinance center if you have any additional questions about the car buying or leasing process in Astoria. We’ll help you with the loan application process and address any of your concerns about things like trading in your old car, putting money down, or securing the best rate. We can’t wait to help!

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