If you’re considering taking out a car loan, you’re probably wondering what the normal interest rate is. The answer depends on a few factors, but we can give you a general idea of what you can expect. Keep reading to learn more.
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Auto loan interest rates have been on the rise in recent years, but there are still plenty of good deals to be had if you know where to look. In general, the average interest rate on a new car loan is around 4%, while the average interest rate on a used car loan is around 6%. However, these rates can vary significantly depending on your credit score, the type of vehicle you’re buying, and the lender you’re working with.
If you have excellent credit, you can usually qualify for very low interest rates – sometimes as low as 0% APR. On the other hand, if your credit is not so great, you may have to pay interest rates of 10% or more. And if you’re buying a luxury vehicle or a sports car, you can expect to pay higher interest rates than you would for a more modest sedan or SUV.
When shopping for an auto loan, it’s important to compare rates from multiple lenders to make sure you’re getting the best deal possible. And remember – even if you don’t qualify for the lowest interest rates available, there are still other ways to save on your car loan (like negotiating for a lower price or down payment).
The average interest rate for a new car loan
If you’re in the market for a new car, you’re probably wondering what the average interest rate is on a car loan.
The truth is, there is no simple answer. The interest rate you’ll pay on your car loan depends on a number of factors, including your credit score, the length of the loan, and the Loan to Value (LTV) ratio.
With that said, here’s a look at the average interest rates for new and used car loans in 2019:
New Car Loan: 4.21% – 8.70%
Used Car Loan: 5.33% – 10.12%
As you can see, the interest rate you’ll pay on your car loan depends on a number of factors. If you have good credit, you can expect to pay a lower interest rate. However, if you have bad credit, you can expect to pay a higher interest rate.
If you’re looking to get the best possible interest rate on your car loan, it’s important to shop around and compare rates from multiple lenders. By doing so, you can be sure that you’re getting the best deal possible.
The average interest rate for a used car loan
The average interest rate for a used car loan is typically higher than the average interest rate for a new car loan. This is because lenders see used cars as more of a risk than new cars. The average interest rate for a used car loan is about 5% to 7%.
Factors that affect interest rates on car loans
There are a variety of factors that can affect the interest rate you receive on a car loan, including your credit score, the length of the loan, the type of vehicle you’re purchasing, and the dealership you’re using. In general, shorter loans will have higher interest rates than longer loans, and newer vehicles will have higher interest rates than older vehicles. If you have a good credit score, you may be able to get a lower interest rate, but if your score is lower, you may have to accept a higher interest rate.
How to get the best interest rate on a car loan
The interest rate on a car loan can vary based on a number of factors, but the average rate is around 4%. Here are a few things that can influence your interest rate:
-Your credit score: This is one of the most important factors in determining your interest rate. The higher your credit score, the lower your interest rate will be.
-The type of car you’re buying: Some cars are more expensive than others, and loans for more expensive cars tend to have higher interest rates.
-The length of the loan: The longer the loan, the higher the interest rate will be. Shorter loans generally have lower interest rates.
If you’re looking to get the best interest rate on a car loan, here are a few things you can do:
-Shop around: Don’t just go with the first lender you find. Talk to multiple lenders and compare rates before you make a decision.
-Have good credit: As we mentioned above, your credit score will have a big impact on your interest rate. If you have good credit, you’ll be more likely to get a lower rate.
-Choose a shorter loan: Shorter loans generally have lower interest rates than longer loans. If you can afford it, choose a shorter loan period to get a better rate.