What Is The Average APR For A Car Loan?

Suppose you want to finance a car. In this case, you probably understand that financing is the most common way to obtain a vehicle. While financing a vehicle, there will always be an interest rate attached to the car loan, expressed as an Annual Percentage Rate (APR). The average APR of these auto loan rates is determined by many different factors, which can all be found in the list below.

1. Credit Determines APR

When you finance a car, your credit score will typically always be one of the most important factors in determining terms for an auto loan. When it comes to determining eligibility and terms for a car loan, credit scores are all separated into tiers. These tiers, along with the credit score range associated with each, can be found in the following list:

• Superprime: 781-850 
• Prime: 661-780 
• Nonprime: 601-660 
• Subprime: 501-600
• Deeper Subprime: 300-500

2. Average APR For New Cars

Something you should note is that auto loan rates for new cars differ from auto loans for used cars. With this being said, it is important to understand the interest rates that come with new car financing. Hence, you can find a list below that details the average new car loan interest rates for each credit tier as indicated by Experian:

• Superprime: 4.93%
• Prime: 5.06%
• Nonprime: 11.30%  
• Subprime: 17.93%
• Deeper Subprime: 25.05% 

3. Average APR For Used Cars

As mentioned above, the auto loan rates for a used vehicle will be different from that of a new one. Thus, before you decide to finance a car that is used, you should first consider the interest rates associated with used vehicles. If you browse the following list, you can see the average interest rates for each credit tier according to Experian:

• Superprime: 5.18% 
• Prime: 5.31%
• Nonprime: 11.55% 
• Subprime: 18.18%
• Deeper Subprime: 25.30%

4. Average APR For Refinancing

Upon getting auto financing and paying it down for a while, you may consider refinancing your vehicle. The most significant reason to refinance a vehicle is to lower the average APR on your vehicle. For example, if your credit score has improved since you initially financed your vehicle, you may be able to get a better interest rate through refinancing. Perhaps you are considering refinancing. In this case, you can take a look below at the average interest rates for each credit tier when it comes to refinancing a car:

• Superprime: 4.36% 
• Prime: 5.06%  
• Nonprime: 7.82% 
• Subprime: 16.27% 
• Deeper Subprime: 19.47%

5. Improving Credit

Suppose you visit a used car dealer near you, but you are unable to qualify for a loan due to your credit, or maybe your credit falls just short of a credit tier. If you are in any of these scenarios, you likely want to improve your credit. However, you may not know how to go about improving your credit. In this case, we at Toyota Direct want to help inform you as much as possible. Therefore, the list below describes a few helpful tips for improving credit:

• Pay off overdue accounts
• Lower revolving debt
• Pay bills on time
• Ensure an accurate credit score by checking your credit report
• Keep old accounts open
• Limit credit and loan requests

6. Special Interest Rate Offers

If you would like to save money at Toyota Direct’s used car lot near Columbus, Ohio, or anywhere else, you should consider specials and deals for auto loan interest rates. The fact is that many dealerships offer reduced interest rates on auto loans during holidays or end-of-the-year sales. For this reason, you should always stay watchful, striving to time your car shopping according to any active deals. 

Tags: auto financing, auto loan rates, car financing, finance a car, used car dealership near me, used car lots Columbus Ohio
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