Auto finance rates have dropped significantly, so now is an excellent time to shop for a new or used vehicle. If you are already paying on an auto loan, you may be able to refinance for a better rate.
Read below to get insights into current auto loan interest rates, or use the car loan calculator to customize your experience.
- Shorter terms give you lower interest rates but higher payments. New and used car loans are typically granted in 3-year, 4-year, 5-year, and 6-year contracts. In today’s economy, a 3-year loan can cost you between 2.6% and 6.4% in interest for a new car and 2.8% to 14.8% interest for a used car. A 5-year loan typically ranges from 2.7% to 11.0% for a new car and from 2.9% to 20.7% for a used car. Refinance loans carry similar percentage rates, with longer repayment schedules costing more.
- Used cars often carry higher auto finance rates. While some banks and credit unions charge the same rate for new and used auto purchases, others put a 1% premium on used cars. Before you make your purchase, you should decide whether low payments or low interest rates are more important to you.
- Bad credit means higher auto finance rates. A consumer with a history of late payments, debt settlements, and write-off accounts will pay more for an auto loan than someone with a good credit history. Bad credit auto loan rates are generally 3% to 5% higher than the rates for people with good credit. Knowing your credit score before you get a car loan can help you estimate what your finance rate and monthly payment may be. Shopping around can help you get the best auto finance rates now, and then you always have the opportunity to refinance later.
The current auto finance rates can change at any time. Getting approved for a low-interest car loan now can have you driving off with your new vehicle today.