Compare current auto loan rates and find the best financing for your new or used car purchase.
Current Auto Loan Rates
Auto loan rates vary widely based on credit score, loan term, and whether the vehicle is new or used. Used car rates run 1-3% higher because older vehicles depreciate faster, increasing the lender’s risk. Choosing a shorter loan term not only saves on total interest but typically qualifies you for a lower rate as well.
Rates as of March 2026. Updated weekly.
New Car Loan Rates
| Credit Score | 36 Months | 48 Months | 60 Months | 72 Months |
|---|---|---|---|---|
| 750+ (Excellent) | 5.50% | 5.75% | 6.00% | 6.50% |
| 700-749 (Good) | 6.50% | 6.75% | 7.00% | 7.50% |
| 650-699 (Fair) | 8.50% | 8.75% | 9.25% | 10.00% |
| 600-649 (Poor) | 11.00% | 11.50% | 12.00% | 12.75% |
| Below 600 | 14%+ | 14%+ | 15%+ | 16%+ |
Used Car Loan Rates
| Credit Score | 36 Months | 48 Months | 60 Months | 72 Months |
|---|---|---|---|---|
| 750+ (Excellent) | 6.25% | 6.50% | 6.75% | 7.25% |
| 700-749 (Good) | 7.50% | 7.75% | 8.00% | 8.75% |
| 650-699 (Fair) | 10.00% | 10.50% | 11.00% | 12.00% |
| 600-649 (Poor) | 13.00% | 13.50% | 14.00% | 15.00% |
| Below 600 | 16%+ | 17%+ | 18%+ | 19%+ |
Auto Loan Rates by Lender Type
Credit unions consistently offer the lowest auto loan rates, often 0.50-1.50% below banks and dealers. Getting preapproved at a credit union or online lender before visiting the dealership gives you a baseline to negotiate against — dealers will frequently match or beat an outside offer to keep the financing in-house.
| Lender Type | New Car | Used Car | Best For |
|---|---|---|---|
| Credit Unions | 5.25-7.50% | 5.75-8.50% | Best overall rates |
| Online Lenders | 5.75-8.00% | 6.50-10.00% | Convenience, preapproval |
| Banks | 6.00-9.00% | 7.00-11.00% | Existing relationships |
| Dealer (Captive) | 0-7.00%* | 8.00-14.00% | Manufacturer promos |
| Dealer (Subprime) | 12%+ | 15%+ | Damaged credit |
*0% promotions require excellent credit and often shorter terms
Monthly Payment Calculator
The loan term you choose has a bigger impact on total cost than most buyers realise. A 72-month term on a $30,000 car looks attractive at $512 per month, but it costs $6,837 in interest — more than double what a 36-month term costs. Shorter terms mean higher monthly payments but dramatically less money paid to the lender.
$30,000 New Car
| Term | Rate | Monthly Payment | Total Interest |
|---|---|---|---|
| 36 mo | 6.00% | $913 | $2,862 |
| 48 mo | 6.25% | $706 | $3,895 |
| 60 mo | 6.50% | $586 | $5,166 |
| 72 mo | 7.00% | $512 | $6,837 |
| 84 mo | 7.50% | $461 | $8,700 |
$25,000 Used Car
| Term | Rate | Monthly Payment | Total Interest |
|---|---|---|---|
| 36 mo | 7.00% | $772 | $2,794 |
| 48 mo | 7.50% | $604 | $3,975 |
| 60 mo | 8.00% | $507 | $5,415 |
| 72 mo | 8.75% | $449 | $7,347 |
Average Auto Loan Rates by Credit Score
| Credit Tier | Average New Car Rate | Average Used Car Rate |
|---|---|---|
| Super Prime (781+) | 5.64% | 6.40% |
| Prime (661-780) | 7.01% | 8.75% |
| Nonprime (601-660) | 10.53% | 13.25% |
| Subprime (501-600) | 14.08% | 17.50% |
| Deep Subprime (≤500) | 18.25% | 20.50% |
Cost of Poor Credit
Credit score is the single most expensive variable in auto financing. On a $30,000 car over 60 months, a borrower with poor credit (600 score) pays over $7,100 more in interest than someone with excellent credit. If your score is below 650, it may be worth delaying the purchase by a few months to improve it.
$30,000 car, 60-month term:
| Credit | Rate | Monthly | Total Interest | Extra Cost |
|---|---|---|---|---|
| Excellent (750+) | 6.00% | $580 | $4,799 | — |
| Good (700) | 7.50% | $600 | $5,983 | $1,184 |
| Fair (650) | 10.00% | $637 | $8,246 | $3,447 |
| Poor (600) | 14.00% | $698 | $11,907 | $7,108 |
| Bad (550) | 18.00% | $762 | $15,689 | $10,890 |
0% APR Deals: Are They Worth It?
Manufacturers sometimes offer 0% financing OR cash rebate:
Example: $35,000 Car
| Option A: 0% APR | Option B: Rebate |
|---|---|
| 0% for 60 months | 6.00% + $3,000 rebate |
| Price: $35,000 | Price: $32,000 |
| Payment: $583 | Payment: $619 |
| Total cost: $35,000 | Total cost: $37,134 |
In this example: 0% APR saves $2,134
When rebate wins: Shorter terms, larger rebates, or if financing elsewhere at low rate.
How Loan Term Affects Total Cost
Longer loan terms reduce your monthly payment but increase the total interest and raise the risk of going “underwater” — owing more than the car is worth. A 72 or 84-month loan on a depreciating asset often means you’re still making payments on a car that’s lost half its value.
$35,000 car at 6.50%:
| Term | Payment | Total Interest | Car Value at End* |
|---|---|---|---|
| 36 mo | $1,073 | $3,620 | $22,750 |
| 48 mo | $829 | $4,779 | $18,200 |
| 60 mo | $684 | $6,040 | $14,350 |
| 72 mo | $589 | $7,407 | $11,200 |
| 84 mo | $522 | $8,882 | $8,750 |
*Estimated value assuming 15% annual depreciation
Key insight: 72-84 month loans often lead to being “underwater” (owing more than car is worth).
GAP Insurance: Do You Need It?
Guaranteed Asset Protection (GAP) insurance covers the difference between what you owe on your loan and what your car is worth if it’s totaled or stolen. Because new cars depreciate 15-25% in the first year, you can quickly owe more than the vehicle’s value — especially with low down payments or long loan terms.
GAP insurance costs $200-$400 purchased separately (from your auto insurer or a standalone provider), or up to $1,000-$2,000 added to the loan at the dealership. Never buy GAP from the dealer — it’s almost always available cheaper elsewhere. GAP makes sense if you’re financing more than 80% of the vehicle’s value or choosing a loan term of 60 months or longer.
Getting Preapproved
Benefits of Preapproval
| Benefit | Details |
|---|---|
| Know your budget | Shop with confidence |
| Negotiate better | Leverage against dealer |
| Compare rates | Find best offer |
| Faster closing | Financing ready |
Where to Get Preapproved
- Credit unions - Often best rates
- Online lenders - Quick, multiple offers
- Banks - Good for existing customers
- Comparison sites - See multiple offers
Strategies for Better Rates
| Strategy | Potential Savings |
|---|---|
| Improve credit 50+ points | 1-3% lower rate |
| Make larger down payment | Lower rate tier |
| Choose shorter term | 0.25-0.75% lower |
| Buy newer car | Lower used car rates |
| Get preapproved | Negotiate from strength |
| Check credit unions | Often lowest rates |
| Refinance later | If rates drop or credit improves |
Auto Loan Rate Trends
| Period | New Car Avg | Used Car Avg |
|---|---|---|
| March 2026 | 7.00% | 10.50% |
| 2025 Average | 7.15% | 10.75% |
| 2024 Average | 7.30% | 11.25% |
| 2023 Average | 7.00% | 11.00% |
| 2022 Average | 5.15% | 8.50% |
| 2021 Average | 4.10% | 7.75% |
| 2020 Average | 4.25% | 8.00% |
How to Get the Best Auto Loan Rate
The biggest mistake car buyers make is financing at the dealership without first getting preapproved elsewhere. Dealers add margin to the rate they receive from lenders — sometimes 1-3 percentage points — and keep the difference as profit. Getting preapproved at a credit union or online lender before you step into a dealership eliminates this information asymmetry.
Six Steps to the Lowest Possible Rate
Step 1: Check your credit score. Know where you stand before any lender does. Pull your free credit report at annualcreditreport.com and dispute any errors. A single reporting error can suppress your score by 20-50 points and cost you thousands in interest.
Step 2: Dispute errors and pay down revolving debt. If your utilization is above 30%, paying down credit card balances before applying can raise your score meaningfully. Even a 30-point improvement from 650 to 680 can drop your rate by 1-2%.
Step 3: Get preapproved at 2-3 lenders. Apply at a credit union, your bank, and one online lender (like LightStream or MyAutoLoan) within a 14-day window — FICO treats multiple auto loan inquiries in a short window as a single hard inquiry, so it won’t hurt your score.
Step 4: Use your best offer as a floor. Walk into the dealership knowing your rate. If dealer financing is competitive, great. If not, you have a ready alternative.
Step 5: Negotiate the price before discussing financing. Dealers sometimes raise the vehicle price to offset a low financing rate. Agree on the out-the-door price first, then discuss financing separately.
Step 6: Avoid add-ons that inflate the loan. Extended warranties, GAP insurance, and paint protection packages added to the loan balance increase the amount you’re paying interest on. Price these separately and decide if they’re worth it on their merits.
Red Flags in Auto Financing
Watch for these tactics that can cost you hundreds or thousands:
- Payment packing: Dealer focuses only on monthly payment, not total cost. Always know the total loan amount, rate, and term.
- Yo-yo financing: Dealer lets you take the car home then calls days later claiming financing fell through — hoping you’ll accept worse terms.
- Extended warranties in the loan: Adds interest cost over the life of the loan. If you want a warranty, negotiate separately.
- Rate markup: Ask the dealer what rate they’re getting from the lender versus what they’re quoting you. You can sometimes negotiate this down.
When to Refinance Your Auto Loan
Consider refinancing if:
- Credit score improved 50+ points
- Interest rates have dropped
- You’re paying above 8% on new car
- You’re paying above 10% on used car
- You have 24+ months remaining
Refinance Example
| Current | After Refinance |
|---|---|
| $22,000 remaining | $22,000 remaining |
| 12% rate | 7% rate |
| 48 months left | 48 months |
| Payment: $579 | Payment: $527 |
| Savings | $52/month, $2,496 total |
Related: Auto Loan Calculator | Car Loan Rates by Credit Score | How Much Car Can I Afford?
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy