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Are you unsure of what a good interest rate is for a car loan? You’re not alone. Unless you spend time following the financial news, you might not know what a good car loan rate is. Our chart shows the annual percentage rate (APR) garnered by credit score for both new car and used vehicle purchases. Take a look and find out what APR your credit score is likely to get and how to improve your odds of getting something better than the average interest rate on a car loan.
| Average Credit Score for New Car | Annual Percentage Rate | Average Credit Score for 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 | 10.98% | 501-600 | 16.27% |
| 300-500 | 13.76% | 300-500 | 19.32% |
Of course, every Indianapolis and Avon car-shopper wants to get the best possible rate on their loan. That means planning ahead. Make sure your credit report is correct. If you find errors, work with a credit bureau to get them corrected. This can not only give you a more accurate credit score but can make it rise. The higher your credit score, the better your loan rate will be. What is a good interest rate for a car loan? Anything below 13.6 percent is good.
Once you know what interest rate you’re likely to get, you’re better prepared to negotiate if you’re quoted a higher interest rate than the chart indicates for your score. If you’re offered an interest rate close to the percentage on the chart, you can focus your negotiations on price with the confidence that you’re getting a good car loan rate.
Noblesville drivers are asking, “What is the average interest rate on a car loan?” In the third quarter of 2023 the average credit score for a new car loan was 733 points. That means the average borrower had a relatively high credit score and was able to get around 4.03 percent interest on their auto loans.
Keep in mind that this chart isn’t set in stone. Different lenders will offer different interest rates. That’s why it’s important to shop around. If you apply for financing with Lafayette Volkswagen, our finance team will do the legwork to get many loan offers for you. Then you can choose which one has the best terms and interest rate for you. Don’t automatically assume the loan with the best interest rate is the overall best loan. Read all the fine print regarding the loan terms before making your decision. Not happy with the rate available to you? One option is buying the vehicle now and using your excellent payment record over the next few years to boost your credit score. Then you can refinance your loan for a better rate.
No matter what automotive financing questions you have, the finance department at Lafayette Volkswagen can help! From knowing what is a good interest rate for a car loan to understanding how to sell your car in Indiana, we have the experience and knowledge you want for navigating all stages of car ownership. Give us a call today.
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