What Is a Good Interest Rate for a Car Loan

If you’re getting ready to apply for financing on a new or used vehicle in Matthews, a smart question to ask is, “What is a good interest rate for a car loan?” You don’t want to accept a bad interest rate and overpay for your vehicle. What is a good car loan rate for one driver may be different from another, as interest rates are dependent on credit scores. In the table below, you can view the average car loan rates for new and used vehicles to see where you should aim based on your credit score. 

What Is the Average Interest Rate On a Car Loan?

Credit scores range from 300 to 850. The higher your credit score, the lower the interest rate you can qualify for. Generally, interest rates for used cars are higher than the interest rates for new cars, but this is mostly offset by the lower sticker prices for used cars. What is the average interest rate on a car loan based on credit scores? See where you land on this chart: 

How Can You Secure a Good Interest Rate? 

Understanding how your credit score affects the interest rates you qualify for is just one piece of the puzzle. Review these helpful tips to ensure you get the best rate possible on your next vehicle: 

• Apply for pre-approval with a few lenders. Pre-approval only requires a soft credit pull, so it won’t affect your credit like a hard credit pull. You might get different rates from different lenders, and you can choose the best one. 
• Find a cosigner. This can be a family member or a close friend. If you have bad credit, a cosigner with good credit can help you get approved for a lower interest rate. Remember, if you default on your loan your cosigner will be responsible for the payment and their credit will be impacted. 
• Increase your down payment. Lenders will view you more favorably if you have a large down payment, and you’ll pay less interest overall with the smaller amount you need to borrow.
• Spring for a short-term loan. This means your monthly payment will be larger, but the interest rates on short-term loans are generally lower.

Apply for Financing at Hendrick Porsche

The finance center at Hendrick Porsche is here to help Indian Trail drivers secure a favorable rate on their new or used car loan. Apply for pre-approval online to get started with us today. We have strong relationships with local and national lenders, and our team will work hard to pair you with the best loan for your budget. Have questions? Drop by in Charlotte or contact us and we’ll be happy to provide more information.