Finance

Average Car Loan Interest Rates by Credit Score (December 2022)

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Your credit score has a huge impact on the interest rate you’re offered on an auto loan. Your interest rate has a major impact on the total cost of your loan. Looking at the average auto loan rates by credit score will help you know what to expect.

☝️ Remember that the rates cited are averages. You may get different offers from different lenders. Make sure you shop around for the best rates instead of going with your first offer or the option that has the best advertising.

Average Auto Loan Rates by Credit Score

Here are the most recent average auto loan rates for each credit score bracket.

Average rates for Q3 (April – June) 2022

Actual interest rates are based on many factors such as state, down payment, income, and others.
Source: Experian: State of the Automotive Finance Market Q3 2022

Calculator

Use our auto loan calculator below to see just how much your credit score can affect your monthly payment and the total amount of interest you end up paying for your loan.

Average Rates for a New Car

Most dealerships will advertise plenty of incentives for buying a new vehicle, such as cash rebates, low interest rates, or special lease offers. Buying a new car generally comes with much better interest rates than buying a used vehicle.

Here’s what you can realistically expect to get based on national averages.

Average Rates for a Used Car

We see incredible offers online and on TV for new car loan rates, but we rarely see used auto rates advertised. Borrowers will usually pay a higher interest rate for a used car loan.

Rates are higher for used cars because their value is lower. If the lender has to repossess your car, it may be difficult for them to sell it for enough to cover your balance. That means more risk to the lender. Lenders charge higher rates when their risk rises.

Here’s the rate you can expect to get based on national averages.

You can see the impact of the higher rates. The difference, of course, is that the average sale price of a new car in the US is $39,960, while the average price of a used car is $22,000. That’s a big difference!

Even with higher interest rates, used cars can be a good deal simply because the sticker price is often much lower than the price of a used car.

⚠️ Be Careful!
Buying a used car has its risks. That’s why you always want to check the vehicle’s history. You can run a vehicle history report on sites like Carfax using the Vehicle Identification Number (VIN). If the dealer or seller will not give you the VIN, consider this a major red flag and move on to another vehicle.

Average Auto Refinance Rates

Refinance rates are usually the same as rates for a loan taken at the time of sale, so the figures quoted above will apply.

How Your Credit Score Impacts Auto Loan Rates

Your credit score has a huge impact on the interest rate you’re offered and on the cost of your loan. In the table below, you can see the average interest rates for both new and used cars by credit score to see just how much of an effect it has.

Average auto loan rates by credit score (Q3 2022)

Category Score Range New car
average interest rate
Used car
average interest rate
Deep subprime 300-500 12.93% 19.81%
Subprime 501-600 10.11% 15.86%
Near prime 601-660 7.25% 9.81%
Prime 661-780 4.90% 5.47%
Super prime 781-850 3.84% 3.69%

Actual interest rates are based on many factors such as state, down payment, income, and others. Source: Experian: State of the Automotive Finance Market Q3 2022

How Your Credit Score Affects the Monthly Payment

Here’s an example to illustrate the difference your credit score makes in determining your monthly payment.

Let’s assume you’re taking out a new car loan with the following terms:

Car cost: $30,000
Down payment: $3,000
Loan term: 48 months

Credit Score Interest Rate Monthly Payment Total Interest Paid
300-500 12.93% $723.4 $7,723
501-600 10.11% $686.22 $5,939
601-660 7.25% $649.68 $4,185
661-780 4.90% $620.57 $2,787
781-850 3.84% $607.70 $2,170

As you can see, your credit score plays a major role in determining the interest rate you’re offered and the cost of your loan.

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