The APR (annual percentage rate) of a car loan is the cost of the loan, which includes the interest rate and additional fees. The APR of a car loan is largely dependent on your credit score, and in most cases, the higher your credit score is, the lower your APR will be. The ideal APR for a car loan is one that’s at or below the national average, which varies depending on your credit score. Here are some average car loan interest rates by credit score:
- Superprime (781-850): 5.07% for a new car and 7.09% for a used car
- Prime (661-780): 6.44% for a new car and 9.06% for a used car
- Nonprime (601-660): 8.99%
- 781-850: 4.75% APR
- 661-780: 5.82% APR
- 601-660: 8.12% APR
- 501-600: 10.79% APR
- 300-500: 13.42% APR
- Excellent credit (750 or higher): 5.07% for a new car and 5.32% for a used car
- Bad credit (451-599): 16.46% for a new car and 16.71% for a used car
Its important to shop around for your auto loan and compare a few different options, even if you have a solid credit score. Average APRs for car loans vary from lender to lender. Most lenders also charge lower APRs on new car loans because new cars are more valuable. If youre buying a brand-new car with a high price tag, theres a greater chance that you will need to borrow more money. In this situation, the loan is much more profitable for the lender, so you often get rewarded with a lower APR.
