How Much Are Car Interest Rates? Average Is 6.9%

Car loan interest rates average about 6.9% right now. That is a fair benchmark for solid-credit buyers on a normal term. If your quote runs much higher, you may be paying too much. A weak rate can add thousands to the total cost and push the monthly bill out of range.

How much are car interest rates right now?

Experian’s State of the Automotive Finance Market report is the quarterly benchmark many shoppers use for auto loan APR data. In Q2 2026, the average new-car rate was 6.35% and the average used-car rate was 11.19%. The 6.9% headline sits close to the new-car market, but below the used-car average.

Current market snapshot

APR is the cleanest way to compare offers because it includes interest plus upfront lender fees. It is not the same as the note rate on its own. That matters because two lenders can quote the same nominal rate and still produce different APRs once fees enter the contract.

• New-car average APR in Q2 2026: 6.35%
• Used-car average APR in Q2 2026: 11.19%
• Super-prime new-car APR: 4.41%
• Deep-subprime new-car APR: 16.11%
• Super-prime used-car APR: 6.29%
• Deep-subprime used-car APR: 21.62%

What does 6.9% mean on a $25,000 loan?

On a $25,000 loan over 60 months at about 6.9%, the monthly payment is about $494 and total interest is roughly $4,664. That is near the market middle, but it is not cheap compared with top-tier pricing. The gap to a lower tier can still cost or save thousands.

Auto loan rate comparison table

APR	Monthly payment	Total interest	Difference vs. 6.9%
4.41%	$465	$2,920	-$1,744 interest
6.9%	$494	$4,664	Baseline
8.81%	$517	$6,029	+$1,365 interest
13.52%	$576	$9,542	+$4,878 interest
16.11%	$603	$11,170	+$6,506 interest

That table shows why a rate that looks only a few points higher can still be expensive. Moving from 6.9% to 13.52% raises the monthly payment by about $82 and adds almost $4,900 in interest on the same loan amount and term.

Same rate, different terms

Loan term changes the bill as much as the rate does. A shorter term usually carries a lower APR and almost always cuts total interest. A longer term lowers the monthly payment, but the lender collects interest for more months.

Term	Monthly payment at 6.9%	Total interest
48 months	$597	$3,680
60 months	$494	$4,664
72 months	$425	$5,614
84 months	$377	$6,584

Keep the same $25,000 loan and stretch it from 60 months to 84 months. The payment falls by about $117, which can help cash flow, but you pay roughly $1,920 more in interest. That tradeoff is why a long term can look affordable while still costing more overall.

What rate can a 700 credit score get?

A 700 score usually lands in the prime band, not the super-prime band. In Experian’s Q2 2026 data, prime new-car borrowers paid 6.15% and prime used-car borrowers paid 8.81%. A 700 score can still price above or below that, depending on lender type, term, vehicle age, and down payment.

Credit tiers and typical pricing

Experian’s VantageScore-based tiers break down like this: super prime is 781-850, prime is 661-780, near prime is 601-660, subprime is 501-600, and deep subprime is 300-500. A 700 score sits in prime, but it does not guarantee the tier’s best possible APR.

• Super prime: 781-850
• Prime: 661-780
• Near prime: 601-660
• Subprime: 501-600
• Deep subprime: 300-500

For a $25,000, 60-month loan, the jump from prime used-car pricing at 8.81% to near-prime used-car pricing at 13.93% raises the payment by about $64 a month and adds roughly $3,800 more interest. Move again to deep-subprime used-car pricing at 21.62%, and the payment climbs by about $123 a month versus 8.81%.

Say your 700 score gets a 7.8% offer on a new car, but the lender requires a very long term and a small down payment. That quote can still land above a cleaner prime offer from another lender with a shorter term and more money down.

Why are used car loan rates higher?

Used-car loans usually cost more because the collateral is older, depreciates differently, and can be harder to value and resell if the lender has to repossess it. That extra risk shows up in pricing. It is also why the used-car average in Q2 2026 was 11.19%, well above the 6.35% new-car average.

New versus used pricing

The gap is visible across credit tiers. Super-prime buyers paid 4.41% for new-car loans and 6.29% for used-car loans in Q2 2026. At the bottom end, deep-subprime pricing was 16.11% for new cars and 21.62% for used cars. The spread is wider where lender risk is higher.

Vehicle age matters because older cars often lose value faster relative to the loan balance. That leaves less cushion for the lender if the borrower defaults. A used car with higher mileage or a thin history can also narrow the pool of lenders willing to approve it.

What else affects auto loan APR?

Credit score is one piece of the quote. APR also moves with loan term, down payment, income stability, debt-to-income ratio, lender type, and vehicle age. The Federal Reserve influences auto loan pricing indirectly through broader funding costs, so policy changes can filter into lender pricing over time.

Why the quoted rate can shift

Shorter terms usually get lower rates because the lender is exposed for less time. A larger down payment can cut the amount financed, shrink the lender’s exposure, and improve approval odds, which can help the price as well. Income and debt-to-income ratio matter because they help lenders judge how much room you have to absorb the payment.

1. Ask for the APR, not only the monthly payment.
2. Compare the same loan amount and term across lenders.
3. Check whether fees are built into the APR.
4. Look at the rate impact of a larger down payment.
5. Decide whether a shorter term lowers the total cost enough to justify the payment.

A common first-timer mistake is focusing on the monthly number alone. A 72-month loan can look comfortable on paper, then quietly add thousands of dollars in interest compared with a shorter term at the same APR.

Can dealer financing cost more?

Yes. Dealer financing can be higher than the lender-approved rate if the dealer adds markup or places you in a different product than the one the lender first approved. Always compare the APR on the final contract with the preapproval you already have in hand.

How to compare the final offer

Preapproval should set your ceiling, not your target. If a lender approves you at 6.25% and the dealer contract shows 7.25%, ask why the rate changed and whether the dealership added reserve or moved you into a different loan structure. If the answer is vague, shop the deal again.

For new-car buyers, compare the factory-linked offer, your bank or credit union quote, and any dealer financing side by side. For used-car buyers, the same approach matters even more because the average rate is much higher. Refinance shoppers should check whether their current rate still sits above today’s market for their credit tier.

What rate can I get with a 700 credit score?

A 700 score usually qualifies as prime, so a buyer may see pricing near the prime averages rather than the super-prime numbers. In Q2 2026, that meant 6.15% for prime new-car loans and 8.81% for prime used-car loans. The lender, term, vehicle age, and down payment can still move the quote.

If your offer is materially above those benchmarks, do not accept the first quote. Ask for a shorter term, bring a larger down payment, and get a second or third offer. A small rate cut can save more than a lower sticker price with a worse loan attached.

How does a 72-month car loan change my total interest?

A 72-month loan lowers the monthly payment, but it increases total interest because the balance stays outstanding longer. On a $25,000 loan at 6.9%, total interest rises to about $5,614 at 72 months, compared with about $4,664 at 60 months and about $3,680 at 48 months.

What longer terms do

The rate itself may also rise when you stretch the term, because some lenders price longer loans higher. Even if the APR stays flat, the added months increase the lender’s total return. That is why a long term can be a payment fix and a cost problem at the same time.

Keep reading

• Average Car Loan Interest Rates in 2026 by Credit Score
• Is a 12% Interest Rate High for a Car Loan?
• Why Are Car Loan Rates So High in 2026? Real Reasons

Frequently asked questions

What is the average car loan interest rate in 2026?

For Q2 2026, the average new-car loan rate was 6.35% and the average used-car loan rate was 11.19%, according to Experian’s quarterly benchmark report. Those figures are useful starting points, but your actual APR can land well above or below them based on credit tier and lender.

What factors besides credit score affect auto loan APR?

APR also depends on loan term, down payment, income, debt-to-income ratio, lender type, and vehicle age. A longer term usually raises total interest, and a larger down payment can reduce lender risk. The Federal Reserve influences pricing indirectly, not by setting your auto loan rate directly.

Can dealer financing be higher than the lender’s approved rate?

Yes. The dealer can mark up the rate, or the final contract can reflect a different loan structure than the lender’s original approval. Compare the APR on your preapproval with the APR on the contract before you sign. If the numbers differ, ask for a clear explanation.

How much does a bad credit score raise car loan rates?

It can raise them a lot. In Q2 2026, deep-subprime borrowers paid 16.11% on new-car loans and 21.62% on used-car loans, compared with 4.41% and 6.29% for super-prime borrowers. On a $25,000 loan, that gap can mean thousands more in interest.

Is APR the same as car loan interest rate?

No. APR includes interest plus certain upfront lender fees, so it is the better number for comparing loan offers. The nominal interest rate tells you only the financing charge. Two loans can show the same rate and still produce different APRs once fees are included.

How often do auto loan interest rates change?

They can change whenever lender pricing changes, and lenders do not all update on the same schedule. Broader funding costs, competition, and Federal Reserve policy all feed into those decisions indirectly. That is why a quote from last month may no longer be competitive today.