what are current car loan rates

If you’re thinking about buying a car, one of the first questions on your mind is likely about financing. The interest rate on your auto loan is a huge factor in your monthly payment and the total cost of your vehicle. It can feel confusing to figure out exactly what you’ll qualify for, as rates change frequently and vary from person to person.

So, you’re probably asking yourself, what are current car loan rates? As of mid-2024, average rates for borrowers with good credit often range from around 5% to 8% for new cars and 7% to 10% for used cars. However, your own rate will depend on a few key personal factors.

What Determines Your Personal Car Loan Rate?

Lenders don’t offer the same rate to everyone. They look at your financial profile to assess risk. Your credit score is the single most important factor. A higher score signals that you’re a reliable borrower, which typically earns you a lower interest rate. Lenders will also consider your debt-to-income ratio, the loan term (length), and whether the car is new or used. A longer loan term or an older vehicle often comes with a slightly higher rate.

How to Find the Best Rate for You

Getting the best possible deal requires a little homework. The most powerful step you can take is to shop around and get pre-approved by multiple lenders. This includes checking with your local bank or credit union, as they often have very competitive rates. Don’t just rely on the dealership’s financing—come in with your own pre-approval offer. This gives you a strong negotiating position and helps you recognize a truly good deal when you see one.

Getting Your Finances Ready for a Loan

Before you even start looking at cars, it’s wise to check your credit report for any errors that could be dragging your score down. You can also improve your chances by saving for a larger down payment. A substantial down payment reduces the amount you need to borrow and shows the lender you’re financially committed, which can help you secure a better rate.

While average rates give you a good starting point, your individual financial health is what truly shapes the offer you receive. By understanding the factors at play and taking the time to compare options, you can feel confident you’re getting a fair deal on your next car loan.