What is a Good Interest Rate on a Car Loan in 2025?
Average car loan rates in 2025 are 7.1% for new cars and 11.3% for used cars. But what counts as "good" depends entirely on your credit score — here is exactly what you should expect to pay.
Enter any loan amount, interest rate, and term to see your monthly payment and total interest paid.
Open Loan Calculator →Average Car Loan Rates by Credit Score — 2025
| Credit Score | Tier | New Car Rate | Used Car Rate | Monthly Payment ($30K/60mo) |
|---|---|---|---|---|
| 750–850 | Super Prime | 5.2% | 6.8% | $571/mo |
| 700–749 | Prime | 6.5% | 9.0% | $587/mo |
| 660–699 | Near Prime | 8.5% | 11.5% | $617/mo |
| 620–659 | Subprime | 11.5% | 15.5% | $660/mo |
| 580–619 | Deep Subprime | 14.5% | 19.5% | $706/mo |
| Below 580 | High Risk | 17%+ | 21%+ | $745+/mo |
What is a "good" rate? Any rate at or below average for your credit tier. For excellent credit (750+), below 6% on a new car is excellent. For average credit (660–700), below 9% is good.
How Much Does Your Rate Actually Cost You?
On a $30,000 car loan over 60 months:
| Interest Rate | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 5% | $566 | $3,968 | $33,968 |
| 7% | $594 | $5,640 | $35,640 |
| 10% | $638 | $8,267 | $38,267 |
| 15% | $714 | $12,847 | $42,847 |
| 20% | $795 | $17,748 | $47,748 |
The difference between 5% and 20% on a $30,000 loan: $229/month more and $13,780 extra in interest. Your credit score is worth thousands of dollars.
Where to Get the Best Car Loan Rate
1. Credit Unions — Usually Best
Credit unions are member-owned non-profits. They consistently offer the lowest car loan rates — typically 0.5–2% below banks. You must be a member, but most have easy eligibility. Check local credit unions and national ones like PenFed, Navy Federal, or Alliant.
2. Banks — Second Best
Your existing bank may offer loyalty discounts. Online banks (LightStream, Capital One Auto Finance) are often competitive. Always get pre-approved before visiting a dealer.
3. Dealer Financing — Use Carefully
Dealers make money on financing — they mark up rates from what lenders offer them. However, manufacturer-sponsored deals (0% APR for 36 months on select models) can be exceptional. Always compare to your pre-approved rate.
4. Online Lenders
LightStream, Capital One, Carvana, and others offer fully online pre-approval in minutes. Good for comparison shopping without multiple hard inquiries (rate shopping within 14 days counts as one inquiry).
How to Get the Lowest Possible Rate
Before You Apply
- 1Check your credit score — know your tier before you apply. Free at annualcreditreport.com or through your bank.
- 2Get pre-approved from 3+ lenders — rate shop within 14 days (counts as one credit inquiry).
- 3Make a larger down payment — 20% down reduces your loan-to-value ratio and can improve your rate.
- 4Choose shorter loan term — 48-month loans get better rates than 72-month loans. Lenders charge more for longer terms.
- 5Use dealer rate as leverage — tell the dealer you are pre-approved and ask them to beat it.
Should You Refinance Your Current Car Loan?
Refinancing makes sense if:
- Your credit score has improved since you got the original loan
- Rates have dropped since you borrowed
- You have at least 1–2 years left on the loan
- You are not underwater (owe more than the car is worth)
There is typically no prepayment penalty on auto loans. The process takes 1–3 days. Even a 2% rate reduction on a $20,000 balance saves about $400/year in interest.
Enter your loan amount and try different interest rates to see exactly how much each rate costs you over the life of your loan.
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