Auto Loans

Auto Loan Rates Remain Low for January 2019 Car Loans

As of January 2019, the average APR for a 48-month auto loan was 5.30%.

Average auto loan rates October 2019

  • 48-month new car loans 4.57% APR
  • 60-month new car loans 4.61% APR
  • 36-month used car loans 5.11% APR

The average APR for 60-month auto loans has dropped to 4.61% APR. However, dealerships can offer much lower rates to qualified borrowers that range from 0% to 3.9%. The average rate to qualify for special rates was 714.

These rates are up only slightly from all the way back in 2007 when  711 was the average credit score for approved buyers according to Experian. Even with reasonable interest rates available, being aware of all financing options is more important than ever.

Back in 2013, interest rates fell to record lows for auto loans. Six years later there is only a slight increase in auto loan interest rates. This makes the purchase of a new vehicle a financial option for many buyers. A borrower with good credit can even qualify for special deals by car companies. 

Buyer considerations

The average cost of a new car is now $30,977. This means that many buyers choose a longer term to pay off their loans. The average term for an auto loan in 2018 was up to 68.47 months. As the length of these loans gets longer to keep monthly payments down, the amount of interest paid goes up. Finding and locking in the best rate possible should be on every buyer’s mind when considering a new vehicle.

Finding the best interest rates

Comparing rates before buying allows buyers to locate the loan that works best for them. Stay aware of your credit score. The best rates are only available to what lenders refer to as “super-prime” borrowers. These are buyers with credit scores of 781 and above. The average interest rate offered to these “super-prime” buyers during the third quarter of 2018 was 3.68%.

The average rate for sub-prime loans (buyers with a credit score of 600 or below) at the end of 2018 was 11.89%. Approximately 1 in every 5 auto loans is made to a borrower with poor credit. Borrowers with bad credit pay three to four times more than those coming to the table with excellent credit.

Search our database for the best current auto loan rates along with qualifying factors for each lender. Our list includes additional lender fees and borrower reviews.

Check the latest deals on new auto loans

Buyers with good to excellent credit often are able to find great deals from carmakers, like Honda Financial Services and Nissan Finance. For example, Nissan financing rates are currently lower than 2% on most models. The 2019 Nissan Rogue is now available with either $2,000 cashback for buyers with their own financing, or 0% for five years with $500 in bonus cash. Honda currently has a deal on Accords for 1.9% financing on two or three-year loans. The same deal applies for select Civics. Some of these offers vary according to zip code. Check to be sure that these deals apply with dealers in your area.

Purchasing a new vehicle is an investment that should be made only after putting some effort into finding the best rates. Buyers aware of their credit score and educated about current interest rates can feel much more confident they have the best deal available when driving their new vehicle off the lot.

FAQ on Auto Loan Rates

Is it cheaper to finance through bank or dealership?

The interest rate on loans from these dealerships can be much higher than loans from a bank, credit union, or other type of lender. Consider whether the cost of the loan outweighs the benefit of buying the vehicle. Be sure to examine the terms (payment, length and interest rate) of all offers.

What is a good auto loan interest rate?

Here is a breakdown of the typical interest rates you can expect with different credit scores: 850 – 740: Excellent credit score – 3.2% interest rate (on average) 739 – 680: Average credit score – 4.5% interest rate (on average) 680 and below: Sub-Prime credit score – 6.5 – 12.9% interest rate (on average).

Can you negotiate APR on a car?

Yes, just like the price of the vehicle, the interest rate is negotiable. Dealers may have discretion to charge you more than the buy rate they receive from a lender, so you may be able to negotiate the interest rate the dealer quotes to you. Ask or negotiate for a loan with better terms.

What credit score do you need to get 0% financing on a car?

While lenders don’t typically share what your credit scores should be in order to qualify for a 0% APR auto loan, credit scores of 700 and higher (on a scale of 300 to 850) are typically considered good. A score of 720 to 750 or higher may give you an even better shot at getting approved.

Why are used car loan rates higher?

Used car buyers tend to have lower credit scores, according to Edmunds, which is another reason interest rates are higher on used vehicles. Lenders make up for the inherent risk in offering subprime loans or refinance deals by charging higher interest rates, which is why auto refinance rates are often quite high.