Lending Partner
Loan Term
Min. APR
Min. Credit Score
Loan Term 24-84 Months
APR 4.75%
Credit Score 575
  • Below-average credit scores accepted
  • Great interest rates
  • Smooth and easy online experience
Loan Term 24-84 Months
APR 5.59%
Credit Score 640
  • Customers save 26% monthly on average
  • Fast & secure application process
  • Sign and upload documents electronically
Loan Term 36-72 Months
APR 4.99%
Credit Score 620
  • Average savings of $111/month
  • Secure, fully online platform
  • Refinancing available for cars, trucks, & SUVs
Loan Term Up to 72 Months
APR Varies
Credit Score 400
  • Financing for customers with bad, limited, or no credit
  • Offers special military rates
  • A+ BBB rating
Loan Term Up to 84 Months
APR 5.24%
Credit Score 620
  • Most Flexible Terms
Loan Term Up to 84 Months
APR 3.2%
Credit Score 580
  • Get approved in as little as 60 seconds
  • All credit types gladly accepted
  • Absolutely no obligation


Loan Term 48-84 Months
APR 4.29%
Credit Score 550
  • Average monthly savings of $150
  • Work with a personal loan concierge to compare options
  • A+ BBB Rating
Loan Term Up to 84 Months
APR 4.29%
Credit Score 500
  • Specializes in auto refinancing
  • A+ BBB Rating
  • No application fee
Loan Term 36-72 Months
APR 4.67%
Credit Score 500
  • Apply online in minutes
  • A leading provider in refinance loans
  • A+ BBB rating

All APR figures last updated on 3/11/2023 - please check partner site for latest details. Rate may vary based on credit score, credit history and loan term.

In the last quarter of 2022, average new car loan rates range from 4.75 percent to 13.42 percent while used car loan rates range from 5.99 percent to 20.62 percent. The difference between a low and high annual percentage rate (APR) is based largely on your credit score.

This article will explain the factors that determine how lenders set APRs and offer tips for finding the lowest auto loan rates. Also read our review of the best auto loan providers to learn about and compare the top lenders in the industry.

Our Methodology

Our team looks at hundreds of data points across a wide variety of auto loan companies several times a year to rank the best. We weigh industry reputation, availability, loan options, rates, and customer service to determine our scores.

Industry Standing

This rating looks at how long a company has been in business and whether it’s a direct lender or an aggregator of other lenders. Our team also looks at a company’s Better Business Bureau (BBB) rating and accreditation. The BBB analyzes the licensing information, business models, and customer service records of different companies. 


Not all lenders operate in all states, so this score is affected by where a company’s loan products are available. This rating also takes into account a lender’s minimum credit score requirement, any age and usability restrictions, and whether the lender offers in-person locations. We also consider whether a lender offers an online application for its loan products.

Loan Details

Some lenders specialize in certain loan products. We look at which loan options a lender offers to determine this score. These options can include new purchase loans, used purchase loans, and auto refinance loans. We also examine payment terms, minimum loan amounts, and any added features like gap insurance or protection plans.

Rates And Discounts

A company’s loan rates and discounts factor heavily into our final score. This includes a company’s:

  • Starting APR
  • Application fees
  • Prepayment penalties
  • Missed payment forgiveness
  • Rate discounts for autopay, bundling services, car-buying service uses, automatic payments, and more

Customer Service

To determine the customer service score, we look at reviews and complaints on the BBB and Trustpilot. Communication is key to good customer service, so we look at how available a company makes itself. Companies that have online chat features or customer service lines that operate outside of usual business hours score higher.

We tend to give lenders that offer online loan calculators a score higher. These tools help you estimate how much you’ll pay for an auto loan. Knowing that information while comparing lenders makes the process of getting the right loan easier.

Finally, we check if the lender has a mobile app. If a company does, we look at the ratings and reviews of these apps on the App Store and Google Play.

Our Customer Survey

We surveyed 2,000 auto loan customers on their experiences with the process.

Most Common APR

When asked what APR they had, about 54 percent of respondents had APRs of 7 percent and below. Roughly a quarter of respondents had APRs that ranged from 15 to 26 percent.

What People Are Looking For

We found that most people were looking for the best APR when selecting a lender, followed by the best loan terms. Around 14 percent of respondents search for companies that have a lower minimum credit score, while about 5 percent look for higher credit score requirements.

How People Shop For Auto Loans

Nearly 43 percent of respondents got their loans in person at a dealership. About 13 percent each went to credit unions or online lenders, while just over 12 percent of respondents got their loan directly from a bank. Most people seek out prequalification or preapproval before fully committing to a loan.

Customer Satisfaction

Overall, we found that most people were satisfied with their auto loan experience. On a scale of zero to 10, with 10 being “completely satisfied,” over 78 percent of the 2,000 people surveyed rated their overall experience as seven or higher.

What Determines Average Car Loan Interest Rates?

The most important factor that decides your car loan interest rates is your credit score. The better your score, the lower your annual percentage rate (APR) will be. Your APR is the interest rate combined with any costs and fees you pay to acquire the loan. The best rates are reserved for those with credit scores above 800, but according to Equifax, any score above 670 makes you a “low-risk borrower” and opens the door to lower average auto loan rates.

What Is A Good Auto Loan Interest Rate?

Anything below 4 percent is an excellent auto loan interest rate. However, depending on your circumstances, credit score, and current market rates, finding a rate below 4 percent may not be possible.

Average Car Loan Interest Rates By Credit Score

To give you an idea of what average auto loan rates you can expect based on your credit score, see the table below. This outlines the average auto loan rates for new and used cars based on information from the Q4 2022 Experian State of the Auto Finance Market report.

Credit ScoreAverage New Car Loan APRAverage Used Car Loan APR
781 to 8504.75%5.99%
661 to 7805.82%7.83%
601 to 6608.12%12.08%
501 to 60010.79%17.46%
300 to 50013.42%20.62%

Bar chart that shows the average APRs for used and new car loans by credit score range

You can see that rates change drastically by credit score. This also affects what you pay back to a large degree. 

However, your credit score isn’t the only determining factor. Employment status, income, and the type of vehicle you purchase also affect rates. Having a steady income stream and purchasing a newer vehicle will result in better auto loan rate offers.

Credit Score And Car Loan Interest Rates Explained

Your credit score sums up your credit history as a number. To lenders, your creditworthiness predicts the likelihood that you’ll make on-time loan payments. People with lower credit scores end up paying higher interest rates because lenders see them posing a higher risk of late payments or default.

On the other hand, people with good credit scores find lower interest rates because lenders see them as good candidates for paying back loans. Life happens, and you may have a low score because of something that happened in the past on your credit report. Unfortunately, the lowest rates are only available to people with the best scores.

Here’s how Experian ranks credit score ranges:

  • Super prime: 781 to 850
  • Prime: 661 to 780
  • Nonprime: 601 to 660
  • Subprime: 501 to 600
  • Deep subprime: 300 to 500

What Are Bad Credit Auto Loans?

Some lenders specialize in offering loans to those who fall into the subprime credit score band. Bad credit auto loans, also referred to as “subprime loans,” are auto loans with much lower, minimum credit-score limits.

These lenders may only offer certain loan types to subprime customers, but make it easier for folks with lower credit scores to access those loans.

Tips For Reducing Average Car Loan Rates

The best way to reduce the average auto loan rates you find is to improve your credit score. This can be done by paying your bills on time and keeping your credit card balances low. Paying your monthly car payments in full can also help. Outstanding debts or collection notices can impact your credit score, so paying these off will improve your credit.

However, building your credit score can take time and the advice above may not be practical for everyone, especially those with a limited income struggling to pay minimum balances each month.

There are a few other things that can reduce your auto loan rates:

  • Have someone cosign: Many lenders allow you to have another person cosign a loan. A cosigner with strong credit can reduce your interest rates.
  • Buy a new car instead of a used one: While new cars are more expensive, lenders typically offer lower auto loan rates for younger vehicle ages.
  • Place a bigger down payment: A bigger down payment can lower your interest rate and monthly payments as well as the amount of time it takes to pay off your loan.

You might also consider trying to pay your loan in a shorter time frame. While this may not reduce your loan interest rate, it will mean that you pay off your loan sooner and will have to pay less interest. However, be sure to read your loan contract language carefully. Some lenders charge a prepayment penalty – an extra fee for paying down your auto loan too early.

Where To Find The Lowest Auto Loan Rates

The table below shows the lenders that offer the lowest auto loan rates. However, just because a loan provider offers low APRs does not mean everyone is eligible for that rate. Loan terms vary by individual, and there is no single best lender for all drivers.

Some federal credit unions like PenFed offer car buying services. This means you can shop for a car and finance it in one place. Also, some lenders offer both purchase and refinancing loans, while others will offer either one or the other.

Best Auto Loan Rates

The table below shows the current* lowest auto loan rates for a variety of lenders, as well as credit score and loan amount requirements.

LenderLowest New Auto Loan RateLowest Used Auto Loan RateMinimum Credit Score
PenFed Credit Union4.89%5.54%652
Bank of America5.79%5.99%None
Consumers Credit Union5.24%5.49%620

Best Refinancing Rates

The table below shows the best rates* for refinancing loans.

LenderLowest APRMinimum Credit Score
Auto Approve2.49%600

*Accurate as of 3/14/23

Drivers with low credit scores are unlikely to be eligible for the interest rates noted in the tables above. If you have poor credit, try comparing offers from multiple lenders using a site such as AutoCreditExpress.com. This site specializes in finding loans for borrowers with bad credit, so if you have trouble finding auto loan offers, it’s worth checking.

When comparing loans, be sure to only submit applications to auto lenders that allow you to prequalify without a hard credit check. Hard credit checks can hurt your credit score even further. A good first step is to use an auto loan calculator to predict what your payment and total loan cost would be.

How To Apply For An Auto Loan

You can apply for an auto loan online, at a financial institution, or at the dealership when purchasing a car. Some lenders allow you to browse the inventory of participating dealerships after your loan is preapproved. Because most loan applications require vehicle information, you may need to have a particular car in mind before applying.

When you apply for a car loan, be sure to have the following information handy, as it may be required to prequalify and will certainly be required before you submit your formal loan application:

  • Personal details such as name, address, and age
  • Social security number
  • Gross annual income information
  • Vehicle information such as age, mileage, and vehicle identification number (VIN)

While not required during prequalification, before you can secure your loan, you may need additional documentation such as your driver’s license, pay stubs, and personal references.

If you plan to have someone cosign your loan, that person will also need to supply the information and documents mentioned above.

Average Interest Rate For Car Loan: Conclusion

Average interest rates for car loans are determined by a variety of factors, the most impactful thing being your credit score. Depending on your credit score and if you are buying a used or new car, auto loan rates can vary. Before financing a car, we recommend that you look at all of the providers available so you can get the best rates possible.

Recommendations For Lenders

Below are a couple of recommendations for loan providers to start with when looking for an auto loan.

myAutoloan: Top Provider

This Texas-based loans marketplace received our Top Provider award for a few different reasons. First, myAutoloan allows you to compare up to four loan offers at the same time, giving you an excellent sense of what APR and terms you can expect based on your circumstances.

The company is known for its low rates and easy application process. In addition to new and used financing options, myAutoloan also offers refinancing loans, lease buyout loans, and private party loans.

Read more: myAutoloan reviews

Consumers Credit Union: Best Benefits

Consumers Credit Union has competitive rates, no usability restrictions, and no minimum or maximum loan amounts. The terms of an auto loan from the company can last up to 84 months.

Though it’s headquartered in Illinois, the union’s credit is open to nationwide membership. All this adds up to make Consumers Credit Union an especially flexible lender. There is one drawback, though – you must have a credit score of at least 650 to have eligibility.

Read more: Consumers Credit Union reviews

Average Car Loan Rate: FAQ

Below are some frequently asked questions and answers regarding average interest rates for car loans: