Average auto loan rate by credit score and loan term
Quick Answer
The average auto loan rate at commercial banks is 7.54 percent for 60-month new car loans and 7.17 percent for 72-month loans, according to the Federal Reserve. Your own rate depends on your credit score, the term and the vehicle, so prequalify to see it.
These are bank averages for new cars, so used car rates and your own offer can be higher. Compare each quote's APR with these averages before you choose.
At a glance
- Bank average at 60 months
- APR of 7.54 per the Federal Reserve
- Bank average at 72 months
- APR of 7.17 per the Federal Reserve
- How the average is built
- Simple unweighted average of banks' common rates
- Your own rate
- Depends on credit, term and vehicle
Current average auto loan rate
The current average auto loan rate depends on your credit profile and the length of your loan. According to Federal Reserve Board, G.19 Consumer Credit, average new car loan rates at commercial banks are 7.54 for 60-month loans and 7.17 for 72-month loans. These figures are annual percentage rates.
Annual percentage rate (APR): the APR determines your total cost of borrowing
An annual percentage rate (APR) is the yearly cost of borrowing money expressed as a percentage. It combines the interest rate with other fees to show the true yearly cost of the loan. Knowing this number helps you compare different loan offers to see which one is actually cheaper.
Federal Reserve data source and limitations
The Federal Reserve Board, G.19 Consumer Credit states these new car and personal loan rates are simple unweighted averages of each bank’s most common rate. The Federal Reserve series above covers new car loans at banks, so compare used car quotes from several lenders. You can find your specific rate by comparing your credit score against current market offers.
Monthly payment examples for different terms
Suppose a borrower wants to see how different terms affect their monthly costs. For example, a borrower takes a loan for $30,000 with a 5% interest rate. For a 60-month term, the monthly payment is $566.09. You can compare auto loan companies for poor credit to see how a 72-month term makes the monthly payment $489.85.
National interest rate
| Loan duration type | Loan term length | Average auto loan rates |
|---|---|---|
| Short term option | 60-month loan term | 7.54 percent APR |
| Long term option | 72-month loan term | 7.17 percent APR |
| Standard loan period | 60-month loan term | 7.54 percent APR |
A calculator with interest helps you figure out exactly how much you will pay over the life of the loan. Use this tool to balance your monthly budget with the total interest cost.
What is the national average auto loan rate?
Commercial banks are financial institutions that provide loans and other services to the general public.
How does the average rate change by credit score?
The average rate change depends on the credit score of the borrower. Higher credit scores generally qualify borrowers for a lower average interest rate for auto loan products. Lower credit scores typically result in a higher average auto loan interest rate. Borrowers should prequalify to see their specific rate based on their own score.
These figures are simple unweighted averages of each bank’s most common rate.
Lender type comparison
| Borrower Credit Profile | Qualifying Status | Average auto loan |
|---|
Variations in auto rates for banks, credit unions and dealers
Lenders calculate different costs based on risk profiles. Borrowers can save money by comparing these sources to find the best terms.
Changes to the auto loan by length of term
Auto loan interest rates generally increase as the loan term gets longer. Lenders often charge higher rates for longer terms because the lender remains exposed to the loan for a greater period of time. Borrowers can reduce their total interest cost by choosing a shorter repayment period.
Car loan term costs
- Federal Reserve consumer credit release rates represent simple unweighted averages of each bank’s most common rate.
- Lenders use different methods to calculate the specific interest rate for a requested loan term. A loan term is the amount of time you have to pay back the full amount of the loan.
- Borrowers should request specific rates from each lender for the different terms they are considering.
Why do averages change over time?
Average auto loan rates fluctuate based on the Federal Reserve consumer credit release data and broader economic conditions. Market changes influence the rates that commercial banks set for new car loans.
What is the difference between new and used car averages?
The difference between new and used car averages involves higher interest rates for pre-owned vehicles. Lenders typically assign higher rates to used cars because the asset depreciates faster than a new vehicle. While new car rates are reported by the Federal Reserve, used car averages vary by lender and vehicle age.
Borrowers should evaluate multiple lenders to find the best terms for a pre-owned vehicle. Comparison helps identify which institution accepts specific vehicle types or offers lower rates for certain conditions.
Vehicle type comparison
- Borrowers should compare used-car quotes from several lenders to find the most competitive interest rate.
- Lenders often adjust the average used auto loan interest rate based on the age of the vehicle.
- New car loans at commercial banks follow specific averages reported by the Federal Reserve.
- Used car loans generally cost more than new car loans because of higher risk profiles.
- Negotiating with a lender can help a borrower secure a lower rate for a specific vehicle.
New versus used car loan averages
The Federal Reserve G.19 consumer credit release reports average new car loan rates at commercial banks of 7.54 percent for 60-month loans and 7.17 percent for 72-month loans in its latest monthly column. This data provides a baseline for new vehicles, while used car loans generally cost more but no bank average is quoted here.
Is the average a rate or an APR
The average auto loan rate is typically reported as an annual percentage rate (APR). An APR represents the total cost of borrowing money over a year. It includes the base interest rate plus other costs like lender fees. Use the APR to compare different loan quotes accurately because it reflects the full cost of the debt.
Federal Reserve reporting of annual percentage rates
The Federal Reserve consumer credit release reports average new car loan rates as annual percentage rates. These figures represent simple unweighted averages of each bank’s most common rate. This method ensures the data reflects standard lending practices across the banking sector.
The difference between average interest and APR
An interest rate identifies the cost of borrowing the principal amount. The APR calculation adds specific fees into that percentage. Because lenders may charge different fees, the interest rate alone does not show the complete cost. You should request the APR from any lender to see the total cost you will pay.
How credit tiers change rates
- Buyers with strong credit
- If your score is in the top tier, you are likeliest to see rates near or below the averages.
- Buyers with lower scores
- If your score is below fair, your offers are likely above the average, so compare credit unions.
- Buyers choosing a long term
- If you want the lowest payment and choose a long term, these terms tend to carry higher rates.
Mistakes when reading averages
- Do not read the average as your rate. Your offer depends on credit, term and the car.
- Avoid comparing a rate with an APR.
How to secure the best average auto loan rate
Securing a competitive auto loan requires comparing specific offers against national benchmarks to ensure you receive a fair interest rate.
Actionable steps for your loan application
- Check your credit score. Retrieve your current score from your credit provider.
- Prequalify with a bank and a credit union. Request prequalification from both a bank and a credit union. This provides you with specific potential rates without affecting your credit.
- Compare each APR with the Federal Reserve averages. Compare your quotes to the Federal Reserve Board, G.19 Consumer Credit report.
- Ask for quotes at two terms. Request specific quotes for 60-month and 72-month terms. This shows you how the interest rate changes based on the length of the loan.
- Record the date of each quote. Write down the date for every quote received. This helps you track how often rates change and when an offer expires.
Frequently asked questions
- How do I find my own rate?
- Finding your specific rate requires comparing your credit score against current market offers. Borrowers should prequalify to see a personalized rate based on their own profile.
- Why is my quote above the average?
- Your quote can sit above the average because lenders price your credit, the term and whether the car is new or used.
- What lowers your rate below the average?
- Lowering your rate below the average depends on your credit profile and the length of your loan. Higher credit scores generally qualify borrowers for a lower average interest rate.