what is the current apr on car loans

[LeSienna]

The current average APR for a new car loan is approximately 7.2%, while used car loans average around 9.7% for borrowers with good credit. However, your actual rate can vary dramatically, from as low as 3.99% for well-qualified buyers on specific models to over 14% for those with subprime credit. The rate you receive is primarily determined by your credit score, the loan term, the lender, and whether the vehicle is new or used.

The single most important factor is your credit score. Lenders use this to assess risk, and even a small difference can mean a significant change in your APR. Generally, scores above 720 are considered prime and receive the best rates, while scores below 630 fall into the subprime category.

Credit Score Tier	Estimated New Car APR	Estimated Used Car APR
Super Prime (781-850)	5.18%	7.09%
Prime (661-780)	6.79%	9.27%
Non-Prime (601-660)	10.56%	15.96%
Subprime (501-600)	14.99%	21.55%
Deep Subprime (300-500)	16.99%	23.67%

Source: Experian Automotive Q1 2024 data. Rates are for illustrative purposes and can change.

The loan term also plays a crucial role. While a 72-month (6-year) loan offers a lower monthly payment, it almost always comes with a higher interest rate compared to a 36 or 48-month term. You'll end up paying more in total interest over the life of the loan. To get the best rate, it's essential to shop around and get pre-approved from multiple sources like credit unions, banks, and online lenders before visiting the dealership. Credit unions are often very competitive.

[AlexandraMarie]

Right now, it's all over the place. My buddy with great credit just got a new SUV at 5.9%, but my cousin, who's still building his credit, got stuck with 12% on a used car. The best move is to check your own credit report first. Then, hit up your local credit union—they usually have the lowest rates. Don't just take the financing the dealer offers you; that's where they make a lot of their profit. A quick online search for "auto loan rates" will give you a real-time picture.

[LukasMarie]

As of this quarter, the national average for a 60-month new car loan sits around 7.2%, according to Freddie Mac. The Federal Reserve's interest rate hikes have pushed borrowing costs up across the board. Your personal rate, however, is the key. It's not one-size-fits-all. A high credit score, a shorter loan term, and a substantial down payment are your best tools for securing an APR below the average. Always get pre-approved to have leverage at the dealership.

[Cory]

I just went through this. The advertised low rates you see on TV? Those are for the absolute best credit scenarios. For most people, expect something higher. I found that dealerships were offering me 8.5%, but my own bank pre-approved me for 6.8% on the same car. It pays to do your homework. The big takeaway is that the "current" APR is really your current APR, based entirely on your financial profile. Don't focus on the average; focus on what you can qualify for.

[BrynleeRose]

The current auto loan APR environment is elevated compared to the low rates of a few years ago. The primary driver is the Federal Reserve's policy, which influences the cost of funds for all lenders. For consumers, this means securing a low rate requires more effort. Beyond your credit score, consider the loan-to-value ratio; a larger down payment can sometimes secure a better rate. Also, be wary of long-term loans (84 months) that mask high interest with low monthly payments. The most effective strategy is to compare offers from at least three different types of lenders.