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What is the normal interest rate for a car loan?
I just got an offer for a car loan, but the interest rate seems kind of high. That said, I don’t have a frame of reference. In general, what is the normal interest rate I should expect for a car loan?
Joshua Levy · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
It can be hard to determine what a normal interest rate looks like since the rate depends on many variables, such as the loan term, the borrower’s credit score, and the amount borrowed. That said, the average car loan interest rate in 2021 is 4.09% for new cars and 8.66% for used cars.
Interest rates vary widely. To put it in perspective, here are the average
car loan
interest rates based on credit and new or used cars in 2021:- 781-850: new car 2.34%; used car 3.66%
- 661-780: new car 3.48%; used car 5.49%
- 601-660: new car 6.61%; used car 10.49%
- 501-600: new car 11.03%; used car 17.11%
- 300-500: new car 14.59%; used car 20.58%
While borrowers with good credit scores can typically expect interest rates of 3-6%, individuals with bad credit may see rates as high as 10-15%! If you’re still worried about getting a high interest rate, try making a large
downpayment
, applying for a shorter-term loan, or using a cosigner to secure a lower APR
.For help keeping up with your monthly payments, start saving on car insurance with
Jerry
. A licensed broker, the Jerry app can help you compare personalized quotes from over 50 top providers, including Travelers and Nationwide, for free. When you find a better plan, Jerry can help you buy your new coverage and even help cancel your old policy. The average Jerry driver saves $879 a year on car insurance!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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