The average annual percentage rate (APR) on an auto loan differs by the type of lender that finances your purchase. Banks tend to offer higher interest rates and shorter loan periods. The major auto finance agencies tend to charge lower interest rates stretched out over longer periods of time. The Federal Reserve compiles this information and makes it publicly available.
Report G19
Around the fifth day of every month, the Federal Reserve releases a statistical report on consumer credit. This is known as statistical release G19. It contains average interest rates for the month before last as well as several prior years and quarters. Data on other types of consumer credit, including credit cards and personal loans, are also on it. To find the report, log onto the Federal Reserve's website at FederalReserve.gov and click on the link marked "Economic Research and Data."
Average Rates
According to the G19 Report issued on Jan. 7, 2011, the average interest rate for a 48-month loan from a commercial bank was 5.87 percent in November 2010. The average interest rate from an auto finance company was 4.6 percent with a period of 62 months. The average amount financed was $27,000.
Other Data
HSH Associates also makes average APRs available according to metropolitan area. Data from HSH show that average auto loan rates were 4.7 percent in Cleveland while they stood at 6.8 percent in Los Angeles in December 2010. Those rates were for loans of $20,000 to borrowers with good credit.
Truth-in-Lending
Because there are variations in the interest rates and the length of loans, you should shop around for the best deal. This doesn't necessarily mean the lowest interest rate. A higher APR with a shorter payoff period may cost you less in interest than a lower interest rate stretched out over a longer period of time. Review the truth-in-lending statement offered to you by the lender before accepting a loan so that you can determine the true cost of credit.
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