Average Car Loan Interest Rates in 2024

Deciding on an auto loan is a major decision that will impact your finances for years to come. For example, the average monthly payment on a new car loan is $734 and the typical repayment term is about 68 months, according to the Q2 2024 State of the Automotive Finance Market by Experian Automotive. 

To ensure you get the best deal possible, you'll need to understand the ins and outs of interest rates — including how to know if the rates you’re offered are competitive. To help, here’s a guide to the average car loan interest rates in 2024.

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Average car loan interest rates based on credit score

The average interest rate for a car loan is currently 6.84% if you’re buying new and 12.01% if you’re buying used, according to Experian Automotive. The rate a lender offers you, however, will depend on the amount of risk you present. To assess your risk level, lenders often consider a wide range of factors, such as:

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• Credit scores
• Credit history
• Repayment term length
• Loan amount
• Down payment amount
• Vehicle specs 
• Debt-to-income (DTI) ratio

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In the end, the less likely you are to default (in the lender’s eyes), the lower your rates will be. For example, the average rates of highest-risk borrowers are around three times higher than those of low-risk borrowers. 

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Average car loan interest rates by credit score

Here’s a closer look at how the average APRs for car loans vary by credit score.

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Do auto loan rates change?

Lenders regularly adjust their car loan rates in response to changing economic conditions and fluctuations in the Federal Reserve's benchmark rate. For example, the Fed’s rate hikes throughout 2022 and 2023 drove up interest rates on all loan and banking products, including auto loans. The average interest rate for a new car loan was just 4.61% in 2022 — 2.23% lower than it is now. 

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Changes to an auto lender’s rates don't mean your interest rate will change if you have an existing auto loan. In most cases, auto loans come with fixed rates that stay the same throughout the loan term and you’ll need to refinance to get a lower rate.

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How to get a better auto loan rate

If you’re not happy with the auto loan rate a lender quotes you, here are a few ways to get a better one: 

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• Boost your credit score: Look for ways to quickly improve your credit score such as removing mistakes from your credit reports, adding bills through Experian’s Boost program and paying down revolving credit lines. 
• Shop around: Rates vary between lenders so shop around, apply for preapprovals and compare at least three to five quotes. 

• Make a larger down payment: Paying more up front can decrease the amount you need to borrow and the risk you present to the lender. 
• Choose a shorter term: The average interest rates for car loans increase as repayment term lengths increase, so a shorter repayment term could lower your rate. ‍
• Apply with a cosigner: Apply with a well-qualified cosigner who agrees to pay the loan off if you can’t. Their guarantee can reduce the risk you present and land you a lower rate.

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Can I refinance later for a better rate?

Many lenders offer auto loan refinancing so you can replace your existing loan with a more favorable one. However, your ability to land a better rate in the future will depend on market conditions and personal factors. For example, here are a few examples of situations where you could likely get a better rate:

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• Your credit improves: Lower credit scores correlate with lower interest rates, so you might benefit from a refinance if your score improved since you took out your loan. 
• Market rates drop: If market rates drop after you get your loan, a refinance can help you take advantage of the lower rates. 
• You pay down your loan balance: By keeping up with your regular payments, the loan amount you need to refinance becomes smaller. Smaller loans present less risk to lenders, which can mean lower rates.  
• You request a shorter term: Shorter repayment terms come with lower interest rates so choosing a term shorter than your original loan could help. 
• You didn’t comparison shop when you got the first loan: If you didn’t shop around before getting your original auto loan, you may have missed out on a more competitive deal. Comparison shopping during a refinance can help you find out if a lower rate is available, even if market conditions haven’t changed much. 

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If you decide to go ahead with a refinance, you’ll want to run the numbers when considering new loans. Get quotes and see if any lenders can beat your current loan in terms of the interest rate, monthly payment amount and overall cost.

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Tip: Our auto loan refinancing calculator makes it easy to compare quotes to your current loan so you can see which is better.

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FAQs

Learn more about auto loan rates by reviewing the following frequently asked questions.

Is 7% interest on a car loan good?

A 7% interest rate is average for a new car loan and below average if you’re buying used. As the market currently stands, interest rates below 7% are only likely if you’re financing a new car and have a credit score above 660. 

What is a good APR for a 72-month car loan?

A good APR on a 72-month loan is currently a rate that’s at or below 6.86% if you’re buying new and 12.80% if you’re buying used, according to Experian Automotive. However, what’s considered “good” will change over time as the market conditions shift. 

What interest rate can I get with a 750 credit score for a car?

The average interest rate for someone with a 750 credit score is about 7% for a new car or 9% for a used car. That said, your rate will be influenced by factors beyond your credit score, such as your down payment amount, term length and DTI ratio. 

Is a 72-month car loan bad?

A 72-month car loan has pros and cons when compared to loans with shorter terms. On the upside, it can give you more time to pay off your vehicle and lower monthly payments. On the downside, it will often come with a higher interest rate which contributes to a higher total cost.

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