Based on Your Credit Score, Here’s What Car Loan Interest Rate to Expect
In modern times, your credit score reflects your financial health and repayment reliability. As such, the number heavily influences the Annual Percentage Rate (APR) lenders are willing to offer you. Generally, the higher your credit score, the lower your car loan interest rate, potentially saving you thousands over the life of your loan. Conversely, lower credit scores often result in higher interest rates. This is because lower scores signal increased “risk” to lenders.
The chart below illustrates this relationship, showing the typical car loan interest rates across various credit score ranges.
| Credit Score | Average New Car Loan Interest Rate | Average Used Car Loan Interest Rate |
| 579 or below | 14.08% | 21.32% |
| 580-619 | 11.53% | 18.55% |
| 620-659 | 8.86% | 13.28% |
| 660-719 | 6.40% | 8.75% |
| 720 or above | 5.18% | 6.79% |
Used car loans tend to have higher interest rates than new car loans. As of mid-2023, average APRs ranged from just over 5% to more than 21%. By comparing these rates, you might find different lenders offer lower or higher rates than the average for your score.
Understanding where your credit score falls within typical APRs can help you in several ways. For one, you can ensure your rate isn’t an unfavorable outlier. Additionally, you might be able to secure a better-than-average interest rate if you shop around or negotiate with a lender.
