What Is a Good Interest Rate for a Car Loan?

finance signing paperwork for a credit loan

You’re ready to shop for a new car. You check out the latest offers and incentives so you can get the best deal in Gardendale, and then you pick out a new car you love. But when it comes to financing, where do you begin? It can be confusing to understand what is a good interest rate for a car loan in Hoover. Thankfully, Edwards Chevrolet Downtown is here to help you explore what is a good interest rate for a car loan and more, below!

New and Used Car APR

Average Credit Score for New Car Annual Percentage Rate Average Credit Score for Used Car 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?

Average interest rates on car loans vary based on your credit score. Knowing your credit score will help you plan ahead and not get blindsided by a higher interest rate than you expected. Here are the average interest rates on a new car loan based on credit score as of October of 2019:

  • Credit score over 750: 4.24%
  • Credit score 700-749: 4.49%
  • Credit score 650-699: 7.92%
  • Credit score 450-649: 14%
  • Credit score below 449: 18.4%

How Do You Get a Good Car Loan Rate?

Most shoppers aren’t just asking “What is a good car loan rate,” but also “How can I get a good car loan rate?” A high credit score is the key to getting a good car loan rate. If your credit score is hurting your chances of getting a good car loan rate, you can improve it:

  • Pay bills on time to lower your debt-to-income ratio. Making your car loan payments on time will improve your credit score for better interest rates down the road.
  • Shop around to different lenders and see how their car loan rates compare. Don’t forget to include hidden prices that might be included with car loans from non-dealer lenders.
  • Consider a loan for a used car instead of a new car. Used car loan rates are a few percentage points lower.

Family browsing a vehicle

Edwards Chevrolet Downtown Can Help With Your Car Loan Needs

The finance center at Edwards Chevrolet Downtown is here to answer all of your questions about credit scores, financing, and how to get a good interest rate on a car loan. We can help you understand your credit score, then choose the best car that fits your budget – something a non-dealership lender can’t do. If you are working to improve your credit, find out how to get a car loan even with bad credit with us.  You can even apply for financing from your home in Bessemer to get an idea of what you can afford before you begin car shopping. Invest with confidence and discover what is considered good mileage for a used car with our team. Looking to enhance your commute with a new muscle car? Learn more about Chevy Camaro pricing today!

 

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