Interest Rates Today Car

Interest Rates Today Car

Your credit score has the biggest bearing on the interest rates that are provided to you for vehicle loans. Knowing the average auto loan interest rates will help you determine whether you’d obtain a good rate on your auto loan as well as give you an idea of what you might be eligible for.

The MarketWatch Guides Team will break down auto loan interest rates for both new and used cars in this post according to state, credit score, and vehicle type. We’ll also delve deeper into the mechanics of auto loans and discuss where to look for the best auto loan rates given your credit situation.

Key Takeaways:

Annual percentage rates (APRs) include both the interest rate and the added costs that come with auto loans, so they’re often the rate most advertised by lenders.

APRs range anywhere from 5.18% to 21.32% based on your credit score and what kind of auto loan you’re looking for.

Your credit score is affected largely by your payment history and what you owe. It’s also determined by how many accounts you have and how long you’ve had them.

Your loan’s interest rate is also determined by your car’s age and condition, your loan term, your debt-to-income ratio, your loan-to-value ratio and more.

Current Car Loan Interest Rates

Recent APR rates for new auto loans range from 5.18% to 14.08%. For used auto loans, the rates range from 6.79% to 21.32%. Auto loan annual percent rates (or APRs) are the most common rates you’ll see advertised on auto loan sites. APRs include your interest rate along with the fees and other costs that come with the loan.

However, there are a range of factors that can influence what APRs you get. Below we’ll detail average car loan rates by credit score, state and vehicle type.

Average Car Loan Interest Rates by Credit Score

Creditors group people into categories — sometimes called credit bands — based on credit-scoring models like FICO® and VantageScore. While other factors affect the auto loan interest rates you’re offered, the credit band your score falls into is among the most influential.

The following chart shows the ranges of scores that define these categories, as well as the average auto loan rates for new and used car purchases for each category. This APR data comes from Experian’s most recent State of the Automotive Finance Market report.

Where Can You Get The Best Auto Loan Interest Rates?

Lenders don’t all offer the same auto loan interest rates by credit score. You’ll likely find a range of rates available to you if you compare auto loan offers. That’s why it’s good to shop around. There are a number of places you can find auto loans. Some may have better loan options than others, depending on your circumstances.


Most traditional banks offer new and used car loans. Many also offer refinance auto loans, as well as preapproved auto loans that can give you an advantage in the car buying process and make financing easier. If you already have a checking account, savings account or credit card with a certain bank, you may have an easier time getting approved for an auto loan with that financial institution. You may even get a better rate.

Credit Unions

Like banks, credit unions typically offer financing and refinancing for new and used vehicles. However, you have to be a member of a credit union to access its financial products. Membership requirements vary, but the process is simple for many credit unions. Joining can be worth it since credit unions often offer lower interest rates and are more likely to approve loans for borrowers with bad credit.

Online Lenders

Since they don’t have the overhead of physical branches like banks and credit unions, online lending institutions can sometimes offer lower rates. Many of these lenders are backed by commercial banks or are divisions of commercial banks.

Lending Marketplaces

Lending marketplaces let you easily compare car financing offers. After you enter your information on one of these websites, you’ll get several loan offers from different lenders. Using these marketplaces can be a good way to find the lowest rates for your credit profile.


Car dealerships can sometimes offer the lowest auto loan interest rates. While 0% financing is only available for those with excellent credit, you’ll have a hard time finding it anywhere else. But some dealerships offer high interest rates compared to other lenders. Knowing what rates to expect and not allowing yourself to get worn down at the dealership can help you navigate this situation.

Getting a preapproved car loan from another financial institution before you head to the lot may help you negotiate for a better rate, as the dealership may try to beat the other lender’s rate to win your business.

How To Get Lower Interest Rates on Your Auto Loan

If you’re looking for the best auto loan rates, these tips may help:

Increase your down payment: Putting more money down reduces the LTV ratio on your auto loan, which may get you a better interest rate.

Get a discount: One of the most common discounts in the automotive finance industry is for setting up automatic payments, which can reduce your interest rate by as much as 0.5%.

Get a co-signer: If you have bad credit, getting a friend or family member with a good credit score to co-sign a loan with you might get you a lower rate.

Look for a newer car: Most lenders adjust their rates based on the age of a car. If you can find a newer car within your price range, you may get better auto loan interest rates for your credit score.

Choose a shorter loan term: Longer loan terms have lower monthly payments, but they usually come with higher interest rates. If you can afford the higher payments that come with a shorter loan term, you’ll likely get a lower interest rate and pay less interest over the lifetime of your loan.

Refinance later: If you’re stuck with a high interest rate due to a poor credit score, you may benefit from refinancing your auto loan in the future. You can take the interest rate available to you now and make timely payments to improve your credit score, which will eventually put you in a better position with lenders.

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