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Is 7% APR on a car loan too high for a car that's over 10 years old?
I'm shopping for an older used car. My credit union pre-approved me for a loan, but the interest rate is over 7%. I'm not sure if getting a loan is the best idea. Is 7% APR too high on a car loan for an older car?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Because a car that’s over 10 years old is considered high-risk, you’re unlikely to find a much lower rate. Even so, you should shop around to ensure you’re still getting the best rate.
If the current offer is the best one, try to avoid a long-term loan. A high-interest rate and long term can put you
upside down on a car loan
or cause you to pay an excessive amount of interest. If possible, a term that is 60 months or shorter is ideal with a 7% interest rate.
Keep in mind that your lender is likely to ask you to get full coverage on your financed vehicle, even though it’s older. Full coverage can be pricey, but it doesn’t have to break the bank. Try using the free
Jerry
app to compare rates from the top 50 companies and get the best deals delivered to your phone in minutes.”View full answer
- Gregory R.
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