What is a Good Interest Rate for A Car Loan?

January 15th, 2019 by

couple with salesman in car showroom

It’s safe to say that every driver considers starting price when they’re searching for a vehicle, but if you want to avoid overpaying on your next purchase, you also need to be able to answer the question, “what is a good interest rate for a car loan?” The answer, in part, depends on both your credit score and your lender, as well as on whether you choose to buy new or used. Take advantage of the chart below to discover what is the average interest rate on a car loan in the Chardon region, and read on to find out how to get the best interest rate with your purchase.

Average APR for New and Used Car Purchases

Average New-Car Loan

Annual Percentage Rate

Average Used-Car Loan

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%

501-600

16.27%

300-500

13.76%

300-500

19.32%

How Do You Get the Best Interest Rate?

Getting the best interest rate is all about planning. It’s a bad idea to check your credit score too frequently, but you’ll definitely want to take a look and write down your score before you pay a visit to the car dealership. In general, higher credit scores will translate directly to lower interest rates. You’ve seen the chart above, so you already know the answer to the question, “what is a good car loan rate?” Be prepared to negotiate with your lender—even a few points can make a big difference. Pay close attention to the details, too: the length of the loan is no less important than the rate!

What is the Average Interest Rate on a Car Loan?

The average interest rate on a three-year car loan usually gravitates between 3% and 4.5%, but if you have poor credit, you may be given a much higher number. Of course, different lenders can offer dramatically different rates. If you have a longstanding relationship with your bank, they may be your best option for financing.

Drivers near Chagrin Falls and Middlefield should also know that dealerships like Preston Kia also make it easy to apply for financing! Since we have relationships with multiple lenders who all compete for your business, it’s often possible to get a better interest rate when you come to our finance center.

Get a Better Rate with Preston Kia

Contact us today to learn more about your financing options at Preston Kia in Burton. We’ll help you through the car buying process from start to finish.

Posted in Financing, Kia