What is a Good Interest Rate for a Car Loan?

Simi Valley drivers know that Bob Smith BMW offers terrific deals on quality cars, but a lot of different factors influence your unique financing package when you sign that dotted line. So, just what is a good interest rate for a car loan and why does the interest rate vary? We’re here to walk you through the relationship between your credit history, your interest rate, and your options–contact us in Calabasas with any questions!

What is the Average Interest Rate on a Car Loan?

A driver in Woodland Hills with great credit might have a car loan rate around 4%, while someone in Northridge with poor credit could end up with an annual percentage rate over 10%. That’s why it’s important to look at the range of values. What is the average interest rate on a car loan? Generally speaking, the annual percentage rate is between 3-4.5% for a three-year loan. Check out the specifics below:

APR by Credit Score (New Car)

  • 781-850: 3.17%
  • 661-780: 4.03%
  • 601-660: 6.79%
  • 501-600: 10.98%
  • 300-500: 13.76%

APR by Credit Score (Used Car)

  • 781-850: 3.8%
  • 661-780: 5.48%
  • 601-660: 10.1%
  • 501-600: 16.27%
  • 300-500: 19.32%

What is a Good Car Loan Rate?

When it comes to interest rates, the lower the better. However, those 3% interest rates just might not be in the cards if you have no credit or poor credit – but there’s no need to fear! There are plenty of ways to improve your odds at the dealership, from making a bigger down payment to negotiating a trade-in deal. 

How Do I Get the Best Interest Rate Possible? 

The best way to get a good interest rate is to gather as much information as possible. Checkyour credit score to get an idea of what rates you can expect and if you can, start to work on ways to improve your standing – pay off outstanding loans, make future payments on time, and so forth. Additionally, shop around and see where you can get the best rates. Just be sure to complete your applications within a 14 day period to avoid negative credit reporting. Finally, remember that the interest rate is just one part of your loan, so don’t overlook the fine print on your agreement!

Find Your Next Car at Bob Smith BMW

Searching for a good deal on your next vehicle? Check out our national offers and lease and finance offers for budget-friendly savings, and use our free financing tools like our Payment Calculator to start crunching numbers. 

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24500 Calabasas Road • Calabasas, CA 91302

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