Average Used Car Loan Interest Rates by Credit Although there’s always going to be some wiggle room, the average used car loan interest rates are as follows: Excellent Credit (750 or Higher) – 5.1% APR. Good Credit (700 to 749) – 4.91% APR. Average Credit (600 to 699) – 5.89% APR.

Is 10% down on a car good?

As a general rule, aim for no less than 20% down, particularly for new cars — and no less than 10% down for used cars — so that you don’t end up paying too much in interest and financing costs. Benefits of making a down payment can include a lower monthly payment and less interest paid over the life of the loan.

Are interest rates higher on used cars?

Used car loans typically have higher interest rates than new car financing because there’s more uncertainty as to the value of the car, and lenders can demonstrate that used car borrowers default more frequently on their auto loans, regardless of their credit.

What’s the average interest rate on a used car loan?

For deep subprime borrowers with an average five-year used-car loan rate of 20.36%, total interest on their car loan is $9,627, around $7,400 more than what someone with excellent credit would pay in interest. Why Is My Auto Loan Interest Rate So High?

What’s the average rate for a new car?

To get current average auto loan rates, we looked at rates from MyAutoLoan for new-car loans, used-car loans, and car refinance loans for people with different credit scores. For new cars, we assumed a loan amount of $28,800, which is $36,000 (the current average price of a new car) minus a 20% down payment.

How is interest added to the purchase price of a car?

Even though you pay the interest over many years, this is real money that gets added to the total purchase price of the car. If you want to save money, look at ways you can reduce the interest you pay: Buy a less expensive car, put more money down, and/or get a shorter loan with larger monthly payments (if you can afford them). ? ?

Do you have to pay interest on a car loan?

The interest you have to pay on that loan can add thousands to the overall cost. While there are other costs, such as taxes and insurance, to think about, car loan interest is often the second largest cost you’ll face when buying. Getting a great deal on your car loan interest rate is an excellent way to save money.