What is a Good Interest Rate for a Car Loan?

Car finance paperwork

You’ve researched the best prices in New Haven, you’ve found your trade-in value, but what is a good interest rate for a car loan? The answer depends on a number of factors. The best possible interest rate for someone in North Haven with pristine credit scores might be quite different than someone with no credit in Wallingford. In this guide, we’ll walk you through what is the average interest rate on a car loan based on car condition, credit scores, Annual Percentage Rate, and more.

New and Used Car Annual Percentage Rate (APR)

Average Car Loan for a New Car Annual Percentage Rate Average Car Loan for a Used Car Annual Percentage Rate
781-850 3.17% 781-850 3.8%
661-780 4.03% 661-780 5.48%
601-660 6.79% 601-660 10.1%
501-600 6.79% 501-600 16.27%

What is the Average Interest Rate on a Car Loan?

On a typical three-year car loan, the interest rate is generally around 3% to 4.5%. But it’s important to be realistic about your expectations. Your rate will fluctuate depending on factors like:

  • Car Condition: Is the car brand new, certified, or pre-owned?
  • Credit Score: Is your credit score perfect or a little less than ideal?
  • Loan Source: Are you financing with a bank or a dealership?

How Do You Get the Best Interest Rate?

So you know the answer to, “what is a good interest rate for a car loan?” But now, how do you use those numbers to your advantage to get the very best options possible?

  • Research: You’ve already started investigating what is a good car loan rate and you have the chart above to guide your negotiations. You can see that a typical rate falls somewhere between 3.17% and 13.76%, so if you are offered something much higher, start thinking strategically.
  • Negotiations: How does your interest rate factor into your total financing package? Though your interest rate is just one part of the pie, don’t be afraid to speak up if you feel you deserve a better deal.

Finance Your Next Car with Hamden Mazda

Now that you know what is a good car loan rate, it’s time to take the next steps with Hamden Mazda. Apply for financing and our financing team will work with our network of lenders to secure some of the very best deals possible in the Hamden area. We’d also love to help you learn more about Mazda maintenance schedules.

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