What Is a Good Car Loan Rate?

Securing a reasonable rate for your next car loan can be a confusing process. Many people ask us "what is a good car loan rate?" when shopping for new and pre-owned vehicles, with everyone being different in terms of their final paperwork and agreement. Of course, industry averages for new and used cars have fluctuated in recent years, which our team at Granite Hyundai would like to explore with you today. Stay tuned, and let's find what car loan rate makes the most sense for your situation.

How Car Loan Rates Work

Car loan rates essentially represent the cost of borrowing money to purchase a vehicle. The interest rate, most commonly known as an Annual Percentage Rate (APR), will be the additional amount you owe on top of your principal balance. The interest rate determines the cost of borrowing a given amount of money for a vehicle purchase, which looks different depending on credit score, repayment history, current debt, and so forth.

Average Car Loan Rates by Credit Score

Below, we will share the average car loan rates by credit score, which ultimately determines the cost of borrowing money to secure your vehicle. This is key to understanding what is a good car loan rate and what's not.

Note: Higher credit means lower interest rates on your car loan, and lower scores will mean higher monthly payments and total fees.

Excellent Credit

If you have excellent or super-prime credit, the average car loan rate is around 5.27% APR for a new car and 7.15% for a used car as of 2025.

Good Credit

For people with good credit or prime credit, you can bet on car loan rates closer to 6.78% for a brand-new vehicle and 9.39% for a used one.

Fair Credit

If you fall into the fair credit category, your car loan rate will be slightly higher, with rates for new cars at 9.97% and for pre-owned ones at nearly 13.95%.

Poor Credit

People with poor credit (subprime credit) can expect car loan rates for a new vehicle to be around 13.38% and for a used model to be around 18.90%.

Tips to Get the Best Car Loan Rate

Now that you understand what is a good car loan rate, you might be wondering how to get similar terms for your auto loan.

Getting the best possible car loan rate is something we want every customer of Granite Hyundai to receive. Here are some expert tips to make your car-buying experience smoother.

Improve Your Credit Score Before Applying

One of the best ways to secure a less expensive monthly car payment is to raise your credit score before applying. As we shared above, the better the credit, the lower the interest rate, which is something to remind yourself when spending, saving, and budgeting for the future.

Shop Around and Compare Offers

Not all car loan offers will be the same. Depending on the financial institution and the terms of the vehicle, you might be able to shop for a better or lower APR before signing any paperwork. In-house car loans are your best bet a lot of the time, and Granite Hyundai is here every step of the way.

Get Preapproved for Financing

If you can get pre-approved for car loan financing, this can make the process smoother when it's time to actually put your money down and start making repayments. Pre-approval shows lenders you are trustworthy and can make on-time and consistent payments toward this new auto loan.

Consider a Larger Down Payment

Your down payment will make a difference in the final loan terms of your new or used car. Remember, the less money you borrow, the less interest is charged, which means your loan repayment will be easier to budget for. We recommend a down payment of some level, especially when purchasing a vehicle.

Negotiate the Loan Terms

It never hurts to negotiate with the loan provider of your choice. Talking your way into a loan should be your best move, and advocating for better terms based on your repayment ability is a great thing to do. Always speak up, you never know how low you can get!

Frequently Asked Questions

Now that we've covered what is a good car loan rate, let's tackle a few frequently asked questions car shoppers have when securing an auto loan.

What Is a Good APR for a 72-Month Car Loan?

If you are wondering what a reasonable car loan rate is on a 72-month term, this should range from 4.5% to 7.2% for new cars and 7.2% to 12% for used cars for borrowers with good-to-excellent credit. Of course, these rates are based on the assumption that your credit score is high, so everyone below this tier will have a higher APR on a 72-month car loan.

Is a 60 or 72-Month Car Loan Better?

From a financial perspective, a 60-month (five-year) car loan is better than a 72-month (six-year) one. You want to avoid loans that span longer than five years due to the potentially high interest costs, so five years is a perfect cutoff when financing a new or used car, truck, or SUV.

Can You Refinance to Get a Better Rate Later?

Yes! You can certainly refinance a car loan, especially once your balance is low enough to positively impact its terms. Many people do this with their home loan, so a similar scenario can play out with your vehicle. Like we said above, many car loans that are super long have worse interest that is constantly accruing, so getting out of that loan and into one with shorter repayment could benefit you greatly.

Use Granite Hyundai's Credit Restoration Program

Granite Hyundai offers a credit restoration program that makes getting into your next car even easier. We can give you tips and tricks on what is a good car loan rate, and help you secure better loan rate terms. We can also work within your budget and needs while you select the vehicle you'd like to purchase. 

Everyone's APR looks different, but the better your credit score is before we run it, the lower you can expect the interest to be on this new auto loan. Do not hesitate to stop by or contact us online and inquire about auto loans with our team in Somersworth, NH; we will be more than happy to walk you through the process. Drive safe!