Car loan interest rates 2018 |

Car loan interest rates

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Know what rates to expect to find the best deal.

The interest rate is one of the most important factors that impacts how much you pay for a new car. Generally you need strong personal finances to qualify for the most competitive rates. And it’s not the only factor to keep in mind.

Compare rates on top car loans

LendingTree2.29% (As low as )
OneMain Financial16.05% to 35.99%*
Boro4.49% (starting at)
Autopay1.99%–10%Read review
BlueSky Auto Finance2.99% (As low as )Read review
Clearlane2.84% (As low as )Read review

Compare more car loans

What is the average interest rate for a car loan?

The average interest rate on a new car loan is 5.76% as of November 2018

However, that doesn’t mean everyone gets that rate. Rates vary depending on your credit score and whether you’re buying a new car or used car.

Credit score and type of carAverage rate
Excellent — new4.19%
Excellent — used3.47%
Very good — new4.45%
Very good — used5.94%
Good — new7.55%
Good — used10.63%
Fair — new12.14%
Fair — used16.72%
Poor — new14.93%
Poor — used19.51%

Source: Experian’s State of the Automotive Finance Market for Q2 2018

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Rates last updated November 21st, 2018

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Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
Name Product Product Description Min. Credit Score Term of Loan Requirements Car Loans
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Auto Credit Express Car Loans
Get connected with an auto lender near you, even if you have bad credit.
Typically 3 to 6 years
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
LightStream Auto Loans
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
Good to excellent credit
Flexible terms
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
RateGenius Auto Loan Refinance
Connect with a network of over 150 lenders to refinance your car loan.
Income of $2,000+/month, vehicle has less than 150,000 miles, no older than 10 model years, loan balance is at least $10,000, debt-to-income ratio: less than 50%.
LendingClub Auto Refinancing
Lower your monthly car payments and save on interest through a fast and easy online application process.
Fair or better credit
Minimum of 2 years
Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
MotoRefi Car Loan Refinancing
A car loan connection service for borrowers looking to refinance.
1–6 years
Must have an income of at least $2,000/month and have a vehicle with less than 100,000 miles.
LendingTree Auto Loans
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
Good to excellent credit
Typically 1 to 7 years
Must be a US citizen and 18+ years old. Must have good to excellent credit.

Compare up to 4 providers

Where can I find a car loan with competitive interest rates?

Comparing the rates at different banks, credit unions and online lenders is critical to finding the lowest one out there.

  • Banks or credit unions. Since you have an established banking relationship already, it might be easier to get approved, even if you don’t have the best credit. These lenders tend to offer the most competitive rates.
  • Online lenders. Some online lenders borrowers with poor credit find a loan if they can’t qualify at their bank — though you probably won’t get the lowest rate available.
  • Dealerships. Local dealerships often work with all credit ranges but they sometimes inflate the interest rate to make a profit.

8 tips to get the best rate on your car loan

Finding the best car loan interest rate involves preparing and plenty of research beforehand with a potential to save thousands of dollars. These tips should get you started on your journey to scoring a low rate on your next car loan.

How do lenders come up with my rate?

Lenders don’t just rely on your credit when they decide your interest rate. The more well-rounded your application, the better your chances of scoring a low rate. Although there are other factors that may play a role in your interest rate, these are the four main points lenders consider when reviewing your application:

  • Credit score. Those with higher scores generally have access to lower rates, so improving your credit history is an important part of getting a low rate on your car loan.
  • Income. Lenders consider your income because it reflects your ability to pay back the loan. They’ll also want to see a low debt-to-income ratio to make sure you can afford your loan.
  • Loan term. The loan term impacts your interest. Typically, shorter terms of 36 and 48though you probably won’t get the lowest rate available.months have lower interest rates, but your monthly payments are higher.
  • Vehicle. Your vehicle’s make and model also plays a role in your interest rate, especially if you’re buying a used car. Since it’s likely your car will be used as collateral for the loan, lenders often charge higher interest for cars that are likely to break down.

Bottom line

At the end of the day, you can lower the total price you pay for a new or used vehicle by ensuring you’ve found a good deal on your car loan interest rate. When shopping for a new car loan, don’t forget to do your research on each part of the process. If you already have a car loan with a high interest rate and think you could qualify for a lower one, you may want to consider auto refinancing.

Frequently asked questions

*Maximum APR is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan.

Kellye Guinan

Kellye Guinan is a writer and editor with and has years of experience in academic writing and research. Between her passion for books and her love of language, she works on creating stories and volunteering her time on worthy causes. She lives in the woods and likes to find new bug friends in between reading just a little too much nonfiction.

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