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What is a Good Interest Rate for a Car Loan?

Man Sitting at Desk Doing Calculations

Average New-Car Loan

Annual Percentage Rate

Average Used-Car Loan

Annual Percentage Rate

781-850 3.17% 781-850 3.8%
661-780 4.03% 661-780 5.48%
601-660 6.79% 601-660 10.1%
501-600 10.98% 501-600 16.27%
300-500 13.76% 300-500 19.32%

What is the average interest rate on a car loan and what is a good car loan interest rate? A car loan interest rate can run between 3.17% and 13.76%, as you can see in the chart above. Any Temple or Belton driver can expect to negotiate for their interest rate, so it’s good to know as many facts as possible. The finance center at Don Ringler Toyota answers the question, “What is a good car loan rate?” and more below!

What is a Good Interest Rate for a Car Loan?

Have you asked yourself, “What is a good car loan rate”? The lowest possible interest rate on a car loan is 3.17% for a new car or 3.8% on a used car — and that’s for those Waco drivers with very high credit scores. Other factors to weigh when it comes to this question are:

  • Used or New Vehicles: As noted above, interest rates differ when it comes to new and used cars. There are also certified pre-owned vehicles to consider.
  • Simple and Compound Interest: There are two types of interest for car loans – simple and compound. The benefits of simple interest are worth considering.
  • Go Beyond Monthly Payments: There’s asking, “What is a good car loan rate?” and then there’s asking, “What is my ideal payment plan?”. Many drivers have an ideal monthly payment in mind. But you should be alert to when someone can only get to a lower monthly payment by raising interest rates. In the end, you’d be paying a lot more money!

What is the Average Interest Rate on a Car Loan?

So, what is the average interest rate on a car loan? Do that math on the chart and you’ll see that the average interest rate falls between 3% to 4.5%. Here are some tips for those who want to secure that rate:

  • Shop Around: Many Killeen dealerships allow you to apply for financing online and get pre-approved. You can try this at a couple of places to get a ballpark idea of your interest rate.
  • Know Your Credit Score: It’s stating the obvious, but your credit score is a huge determinant when it comes to a car loan interest rate. Bad credit car financing is possible, so don’t give up!

Finance a New or Pre-Owned Car at Don Ringler Toyota!

For drivers asking, “What is a good interest rate for a car loan?” and any other questions, Don Ringler Toyota is here to help. That’s why we provide car buying tips for Temple drivers in addition to special offers and incentives. Contact us today to start the car-buying process with experts who regularly help drivers save!

 

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