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Car Finance Rates: Current and Average Car Loan Rates to Expect
Car finance rates are difficult to categorize as generally good or bad, because the best car loan rates available are highly dependent upon the local and national market for vehicles and the economy. What is considered a good set of used car finance rates at one point may be not so in a few months down the road. Therefore, it’s best to survey the area around you to determine what kinds of rates people are able to get before you plan to finance the purchase of a new or used car.
Loan Rates for New and Used Cars
The interest rates on new or used cars can vary from anywhere around 10% or so up to, on the very highest end, around 25% or 26%. The lower the interest rate is, the less money that you’ll be required to spend overall on the cost of your vehicle. This is also the case with the total term of the car loan; shorter terms that you’re able to pay off more quickly will result in lower interest totals and, therefore, smaller total payments.
Recommendations for Good and Bad Rates
While the average car loan insurance rate hovers between 15% and 20%, it’s a good idea to shoot for a rate as low as 13% or less, particularly if you have good credit and you’re in a stable financial situation in which you’ll be able to pay off the loan quickly and on time. If you’re stuck with a bad credit history, you may find that it’s better to take out a shorter term, high interest rate loan to pay for your car.
Ask a loan negotiator or a leasing company for more information about how to finance your purchase in the best way.
