What is a Good Interest Rate for a Car Loan?

When calculating how much your monthly auto loan payment will be, interest rates play a vital role when you consider an auto loan near Orland Park or Oak Forest. They help determine the final amount you may pay per month. The lower the interest rate you can get, the more favorable your monthly payments will be.

To avoid overpaying your car loan and for a better understanding of the right interest rate for a car loan, see our chart showing an interest rate to keep in mind when finding out what is a good interest rate for a car loan. We’ll also show you what the best interest rates could be as you seek financing for your next used auto purchase from Bettenhausen Automotive Service Center.

Learn more about the average interest for used car loans based on credit scores and the annual percentage rate (APR). Then, we can look over your financing application in no time and get back to you with an answer.

New and Used Car APR

How Do You Obtain a Good Interest Rate for a Car Loan?

To understand what is a good interest rate for a car loan, plan ahead first and foremost. Check your credit history and previous credit scores to note the possible score you could get for your auto loan now. Credit agencies give everyone one free credit history report per year. Take advantage of this free credit report ahead of making your large purchase to see where you can make improvements to your credit report.

The higher your credit score, the lower your interest rate will be because you are seen as less risky compared to other lenders with a lower credit score. You’ll also want to get ready to negotiate. So what is a good interest rate for a car loan? Based on the chart we’ve included here, it could be anywhere between 3.17 and 13.76%, depending on your credit score, for a new vehicle. Used vehicles have an interest rate range between 3.8 and 19.32%. 

After examining our chart, plan the rate you want and be prepared to negotiate if your chosen lender offers you something higher than you expect. Another thing to watch for is the offer. While your monthly payment is important, don’t ignore the rest of the deal. Pay close attention to the details, such as what happens if your situation changes.

One way to negotiate is to point out your more recent credit activity showing you make regular payments on time, have a steady job, and have a high enough income.

What is The Average Interest Rate on a Car Loan?

On a three-year auto loan, the average interest rate is around 3 to 4.5%. But you may be offered a different rate based on your credit score as well as where you’re getting the loan from. The easiest way to compare your car loans and interest rates is to shop around or get pre-approved from a few lenders before shopping elsewhere. Be warned, though, about applying for financing in many places. Credit agencies may downgrade your creditworthiness if you apply for many loans in a short span of time because credit inquiries will show up on your Frankfort credit report.

Test Drive a New or Used Vehicle at Bettenhausen Automotive Service Center

Ready to move one step closer to vehicle ownership? Contact us or call 708-532-9600 to take a test drive. Our lot has a beautiful selection of classic cars for sale. We’ve also got a selection of mobility vans to help you drive easier around Tinley Park. 

After a test drive, connect with our finance center to get pre-approved for an auto loan. All you need to do is find the vehicle that fits your lifestyle. We’ll work with you to find a reasonable interest rate through our network of lenders. Our team will also help you determine what is a good interest rate for your car loan.