What is a Good Interest Rate for a Car Loan?

What is a good car loan rate? That’s a question we hear often from New Richmond car-buyers as they learn how auto financing works — but there’s no simple answer! In fact, lenders will offer you lower or higher APR on your auto loan based on how they perceive your credit-worthiness. More than any other factor, credit score has the biggest impact on your loan APR for Hudson drivers. As the chart below illustrates, higher credit scores correlate with lower APR, or what is a good interest rate for a car loan.

New and Used Car APR by Average Credit Score

New-Car Loan Credit Score Annual Percentage Rate Used-Car Loan Credit Score 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%

How Do You Get the Best Interest Rate?

Now you know what is a good interest rate for a car loan — but what steps can you take to secure the lowest possible APR? Here are a few tips to keep in mind before you apply for a car loan near Amery:

  • Check your credit history and credit score. The higher the credit score, the lower your interest rate will be.
  • Take steps to lower your score. Major changes to your score can take years to achieve, but you can give your score a quick boost with a few simple steps! Speak with an auto finance expert at Bernard's Chrysler Dodge Jeep Ram to learn more.
  • Be ready to negotiate. What is a good car loan rate for car-buyers in similar circumstances? Find out before you speak with lenders, and arrive ready to negotiate. Some lenders may be flexible about your APR if you bring proof of income.
  • Consider in-house financing. Your dealership will likely offer you lower interest rates than your bank. Ask us about financing with a bank vs. your dealership!

What is the Average Interest Rate on a Car Loan?

If you find yourself asking, “What is the average interest rate on a car loan?” You are not alone, many Minneapolis drivers wonder the same thing! The average interest on a 3-year car loan is around 3% to 4.5%, but different lenders are likely to offer different rates. The best way to get the lowest possible interest rate is to shop around, compare lenders, and then compare the offers you receive. You can also get pre-approval from various lenders and compare those rates, but keep in mind that pre-approval offers may differ from final offers.

Explore Affordable Financing at Bernard's Chrysler Dodge Jeep Ram!

Now that you know more about what is the average interest rate on a car loan, it’s time to consider your options. What is a good car loan rate for each type of auto financing? If that’s the question on the tip of your tongue, contact us at Bernard's Chrysler Dodge Jeep Ram for car-buying tips! Get started today with an easy online financing application. We can also help you discern which insurance plans are right for you and explain plans like gap insurance!

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