If you’re looking to buy a car, you’re not alone. With the average cost of a new car around $33,000, it’s not surprising that most people need a loan to finance their purchase. But what kind of interest rate can you expect to pay?
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What to Expect – The Average Auto Loan Rates According to Credit Score
The average interest rate on an auto loan varies depending on your credit score. Here is what you can expect to pay according to your score:
- 720 or higher: 3.65%
- 660-719: 4.68%
- 620-659: 7.65%
- 619 or lower: 12.78%
As you can see, having a good credit score can save you a lot of money over the life of your loan.
Average Apr For Car Loan – NedaLennox
Another factor that affects your interest rate is whether you’re buying a new or used car. Generally, used car loans have higher interest rates than new car loans. According to NedaLennox, the average APR for a new car loan is 4.24%, while the average APR for a used car loan is 7.99%.
There are a few reasons for this. First, new cars tend to have more predictable resale values, which means lenders feel more secure in lending you money. Second, many lenders offer lower interest rates as an incentive to buy new instead of used.
What Is the Average APR for a Car Loan?
The average APR for a car loan is 5.27%, according to Experian. However, as we’ve seen, your individual rate can vary widely depending on your credit score and the type of car you’re buying.
One thing to keep in mind is that your interest rate is only one part of the total cost of your loan. You’ll also need to factor in the length of your loan and any fees or charges.
Average Auto Loan Rates
So what are the average auto loan rates today? According to Credit Repair, the current average for a new car loan is 4.21%, while the average for a used car loan is 4.74%. These rates are based on 60-month loans with an average loan amount of $20,000.
Keep in mind that these rates are just averages. Your own interest rate will depend on your individual circumstances, such as your credit score, income, and the type of car you’re buying. That’s why it’s always a good idea to shop around and compare rates from multiple lenders.
Used Car Loan & Finance
If you’re thinking about buying a used car, there are a few things you should know about used car loans and financing. First, it’s important to understand that used car loans generally have higher interest rates than new car loans, as we discussed earlier.
However, there are some advantages to buying a used car. For example, you can often get a better deal on a used car than you would on a new car. And because the car has already depreciated in value, you won’t take as big of a hit if you decide to sell it later on.
When it comes to financing a used car, you have a few options. You can get a loan from a bank or credit union, or you can finance through the dealership. Many dealerships offer their own in-house financing, but you should be aware that these loans can come with higher interest rates and fees.
If you decide to go with a bank or credit union loan, be sure to shop around for the best rates. You may be able to get a better deal by applying for a loan online or through a peer-to-peer lending platform.
Overall, buying a car is a big decision that requires careful consideration. By understanding the average auto loan rates and shopping around for the best deal, you can save yourself thousands of dollars over the life of your loan.
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