Interest rates for automobile loans do vary significantly based on the amount borrowed, credit score of the borrower, location and other factors. That said, while the base interest rates offered by banks and other financial institutions for auto loans do tend to be pretty similar across the country (although there is some regional variation), it is differences in how banks analyze individual credit risk that represent most of the variability in rates.
Current National Auto Loan Rates
According to Bank Rate, the average interest rate on a 60-month new car loan is 6.19 percent, and the average rate on a 48-month new car loan is 6.22 percent. The average rate for a 36-month used car loan is 7.18 percent.
Better Credit Means a Lower Interest Rate
Your credit is the most significant factor in the interest rate on your auto loan. A credit score above 680 generally gets you access to the best rates, which can be half of the rates paid by those with poor credit.
Highest and Lowest Available Auto Loan Rates
Some auto dealers are offering zero-percent interest loans on certain models, but make sure to read the fine print as sometimes the rate increases after two or three years. Even in a low-interest rate environment, borrowers with poor credit are still paying double-digit interest rates in some parts of the country.
Credit Unions Usually Offer the Lowest Auto Loan Interest Rates
In turns out that credit unions are usually the best place to get an auto loan. According to Cars.com, credit unions offered an average used car loan rate almost 1.5 percent lower than banks in 2009.
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