Whats a good APR for a car?

Asked by: Tyshawn Kulas DDS  |  Last update: August 27, 2022
Score: 4.6/5 (5 votes)

What is a good APR for a car loan with my credit score and desired vehicle? If you have excellent credit (750 or higher), the average auto loan rates are 5.07% for a new car and 5.32% for a used car. If you have good credit (700-749), the average auto loan rates are 6.02% for a new car and 6.27% for a used car.

Is a 20% APR for a car good?

A 20% APR is not good for auto loans. APRs on auto loans tend to range from around 4% to 10%, depending on whether you buy new or used.

Is 5% APR on a car good?

An interest rate of 5% is pretty good for a car loan! Generally, to qualify for that rate, you must have good credit, meaning a score in the range of 700-749. So bravo! However, if you were to wait to buy a car and work on improving your credit score, you may be able to get an even better deal.

What APR is too high for a car?

A high APR (“annual percentage rate”) car loan is one that charges higher-than-average interest rates. The legal limit for car loans is around 16% APR, but you will find lenders that get away with charging rates of 25% or more.

Is 2.9 APR good for a car?

If you're buying a new car at an interest rate of 2.9% APR, you may be getting a bad deal. However, whether or not this is the best rate possible will depend on factors like market conditions, your credit background, and what type of manufacturer car incentives there are at a given point in time on the car you want.

What Is A Good APR For A Car?

21 related questions found

How much APR is too much?

A credit card APR below 10% is definitely good, but you may have to go to a local bank or credit union to find it. The Federal Reserve tracks credit card interest rates, and an APR below the average would also be considered good.

Is 2.75 a good interest rate?

Is 2.875 a good mortgage rate? Yes, 2.875 percent is an excellent mortgage rate. It's just a fraction of a percentage point higher than the lowest-ever recorded mortgage rate on a 30-year fixed-rate loan.

Is 10% APR good on a car?

A 10% APR is not good for auto loans. APRs on auto loans tend to range from around 4% to 10%, depending on whether you buy new or used.

How can I lower my car APR?

Other Ways to Reduce Your Auto Loan Interest Rate
  1. Make a larger down payment. The more you borrow from a lender, the more it stands to lose if you default on your payments. ...
  2. Reduce the sales price. Again, the less money you borrow, the less of a risk you pose to lenders. ...
  3. Opt for a shorter repayment term. ...
  4. Get a cosigner.

Can you negotiate APR on a car?

Yes, just like the price of the vehicle, the interest rate is negotiable. The first rate for the loan the dealer offers you may not be the lowest rate you qualify for. With dealer-arranged financing, the dealer collects information from you and forwards that information to one or more prospective auto lenders.

Is 7.9 APR good for a car loan?

As of January 2020, U.S. News reports the following statistics for average auto loan rates: Excellent (750 - 850): 4.93 percent for new, 5.18 percent for used, 4.36 percent for refinancing. Good (700 - 749): 5.06 percent for new, 5.31 percent for used, 5.06 percent for refinancing.

Is 11 APR good for a car?

That being said, if you have good credit and payment history, a good income, and a cosigner with a credit score of 750 or higher, you should not sign on that loan. However, if you do not have a cosigner, then an 11% to 12% interest rate is about right. But like with everything, you should not jump at the first offer.

Why is my APR so high?

Interest Rates and Auto Loan Terms

Another reason you may be seeing a higher interest rate may be your loan term. Generally speaking, the longer the auto loan, the higher the interest rate. Your APR is usually higher still if you have poor credit and are looking for a lengthy loan term to reduce your monthly payment.

Is 2.49 APR good for a car loan?

“It never hurts to shop around for car loan rates, just as you would with car insurance. But 2.49% for 48 months sounds like a pretty solid deal. My advice is to sign the paperwork on that deal before you let it get away. It's unlikely you'll be able to find a better rate anywhere else.

Is 14 interest rate too high for a car loan?

Car loan interest rates should not exceed 25%. But because car loan rates vary, what might be too much interest on a car loan for one person might actually be a very low rate for another. Car loan APRs range from 0% to 25% or higher since they are largely determined by your credit score.

How much car payment is too much?

According to experts, a car payment is too high if the car payment is more than 30% of your total income. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.

When you pay extra on a car loan does it go to principal?

Answer provided by. “Not necessarily. Some lenders set up their car loans so any extra money goes directly to the interest. Therefore, you should signify on your check or online payment that the extra money is for “principal only.”

What does 0% APR on a car mean?

When you see a deal for 0% APR, it means you won't pay any interest on the loan, which means that you're essentially borrowing money for free — the full amount of every payment you make is applied to your loan. You typically need excellent credit to qualify for these deals.

Is 5.9 APR good for a car?

On a 36-month loan, 5.9% APR with above-average credit is a bad rate. If you see a rate this high with captive financing, it could be because it's for a longer-term loan.

Is 12 percent APR good?

A low credit card APR for someone with excellent credit might be 12%, while a good APR for someone with so-so credit could be in the high teens. If “good” means best available, it will be around 12% for credit card debt and around 3.5% for a 30-year mortgage. But again, these numbers fluctuate, sometimes day by day.

Is 9.9 a good interest rate?

Generally, a good interest rate for a personal loan is one that's lower than the national average, which is 9.41%, according to the most recently available Experian data.

Is 3.875 a good rate?

Just about rate - 3.875% is a fine rate. One could always pay more, perhaps the monthly amount that would have been required for a 15 year mortgage (or more, or less), IF one wishes to pay the mortgage earlier.

Is 5.25 a good interest rate?

From 2017 through 2020, the average ranged from as low as 4.42% to 5.5%. If your interest is around those averages or lower, then it's probably a good rate.

What is a good credit score?

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.