When you take out a car loan, the APR (annual percentage rate) is the annual cost you pay to borrow money, including fees, expressed as a percentage. The APR of your 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 APR of your car loan has a direct impact on how much you will pay to borrow the money, and its important to shop around for your auto loan and compare a few different options. The average APR for a new car loan for someone with excellent credit can be substantially lower than for someone who has poor credit. Average APRs for car loans vary from lender to lender, and some example rate ranges according to Value Penguin are:

• Alliant: 3.24 - 18.19 percent
• CapitalOne: 3.99 - 13.98 percent
• PenFed: 1.99 - 18 percent
• PNC Bank: 2.79 - 14.99 percent

Its important to note that the APR is not the same as the interest rate, although they are related. The interest rate reflects only the annual cost of borrowing the money, while the APR includes the interest rate as well as any additional fees charged by the lender. When comparing loans, its suggested to look at APRs versus interest rates, because APR more accurately reflects how much youll pay to finance a car.