What is a Good Interest Rate for a Car Loan?

Car Finance Paperwork

Ready to apply for a loan to get behind the wheel of a new Toyota model or used vehicle? Are you wondering, “What is a good interest rate for a car loan?” You’re not alone. Many Palmdale-area drivers worry about overpaying due to a high interest rate. Check out the chart below to determine what is a good car loan rate for you based on your credit score. Once you do, you can apply for financing online with Frontier Toyota and get a competitive interest rate.

New and Used Car APR

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%

What is the Average Interest Rate on a Car Loan?

The average interest rate on a car loan depends on the length of the loan, your credit score, and the financial institution. On a three-year car loan, as an example, the average interest loan is anywhere between 3% and 4.5%. The best way to determine an average interest rate on a car loan for yourself is to shop around and get pre-approved in multiple locations. Remember that each pre-approval may impact your credit score, so try to submit your applications within the same week to limit this impact.

How Do You Get the Best Interest Rate?

You now have the answer to: “What is a good interest rate for a car loan?” So, how do you ensure that you get the best interest rate possible for yourself? Consider the following tips:

  • Plan Ahead: Check your credit history. Remember that the higher your credit score, the lower your interest rate will be. Take steps to improve your credit score before applying for a car loan, if possible.
  • Negotiate: Armed with the knowledge of what is a good car loan rate, you have the ability to negotiate with financial institutions. If they offer you a higher rate than what you expected, be prepared to talk them down.
  • Pay Attention to the Details: Don’t focus so much on the interest rate that you ignore the rest of the deal. Pay attention to the details and what the overall offer entails.

Secure Financing with Frontier Toyota

The finance center at Frontier Toyota is here to support you throughout the car buying process. Don’t hesitate to get in touch with any questions about interest rates or anything else related to financing a car.

Frontier Toyota 34.4184556, -118.5501925.