![]() ![]() However, these rates are just averages-you might get a higher or lower rate based on several personal factors, like your lender and the age of your vehicle. Car Loan APRs by Credit ScoreĪs of 2022, the average interest rate for car loans was 4.07 percent for new cars and 8.62 percent for used cars. Shopping around and comparing loans can help you get the best loan terms for your financial situation. In most cases, new cars have lower APRs while used cars have higher APRs. If you have poor credit, you might have to find a subprime lender, or a lender with more flexible eligibility requirements, to take out a car loan.Īnother factor that impacts the APR of car loans is the type of car you finance. ![]() Keep in mind that some lenders won't even offer a loan to borrowers with bad credit. You usually want to choose a loan with the lowest APR for your situation, because it’s the cheapest option for borrowing money. This is because lenders see low-credit borrowers as risky or more likely to default on their loans than those with good credit. In general, borrowers with bad credit get a higher APR and borrowers with good credit get a lower APR. One of the biggest factors is your credit score, which determines your “creditworthiness.” In other words, your credit score indicates to lenders how likely you are to pay back the money you owe. There are a few factors that contribute to the APR of your car loan. ![]() Looking for an auto loan that works for you? Easily compare rates from lenders below. However, it's important to understand what rate you might qualify for before starting the car buying process. You won’t know your exact loan APR until you start applying for loans. In most cases, the higher your credit score is, the lower your APR will be. The APR of your car loan is largely dependent on your credit score. When you search "average APR for car loan," you'll be met with some numbers, but they mean nothing without an understanding of your own financial situation and how car loans work.ĪPR stands for annual percentage rate, and it refers to the cost of your loan, which includes the interest rate and additional fees. ![]()
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