What Is a Good Interest Rate for a Car Loan?

"Good" depends mostly on your credit score, but also on whether the car is new or used and how long the loan runs. Here's how to tell if your rate is competitive — and how to lower it.

→ See how your APR changes your total interest

Rates vary most by credit score

Your credit score is the biggest factor in the APR you're offered. As a rough guide:

Credit tier	Typical new-car APR
Excellent (780+)	Lowest available
Good (660–779)	Slightly higher
Fair (600–659)	Noticeably higher
Poor (below 600)	Highest — shop carefully

Used-car loans usually carry higher rates than new-car loans, and longer terms often come with higher rates too.

→ Compare loan offers and see the interest difference

How to get a lower rate

Improve your credit first if you can wait — even a small score bump can drop your APR.
Get pre-approved from a bank or credit union before visiting the dealer, so you have a benchmark and negotiating leverage.
Don't only negotiate the monthly payment. Dealers can lower the payment by stretching the term while keeping a high rate. Focus on APR and total cost.
Make a larger down payment to borrow less and sometimes qualify for better terms.
Refinance later if rates drop or your credit improves.

Key point: a "good" rate is simply the lowest one you qualify for today — and a couple of percentage points can mean hundreds or thousands in interest over the loan.

Banks and credit unions often beat dealers

Dealership financing is convenient, but the rate is frequently marked up above what you'd qualify for elsewhere. Credit unions in particular are known for competitive auto rates. Getting pre-approved before you shop gives you a real benchmark — if the dealer can beat your pre-approval, great; if not, you already have a better option in hand. Always compare the APR, not just the monthly payment, because the same payment can hide a much higher rate stretched over a longer term.

The bottom line

Benchmark your offer against your credit tier, get pre-approved to compare, and focus on APR and total cost rather than the monthly payment. If your rate is high, refinancing later can fix it.

→ See your total interest at different rates — free