Car loan rates vary widely based on your credit score, loan term, and whether the car is new or used. Here's what you should be aiming for in 2026.
For buyers with good credit (720+), new car loan rates typically range from 5–7% APR. Used car rates run 1–3% higher due to higher default risk on older vehicles. The national average for all buyers combined is around 8–10% APR.
New cars almost always carry lower interest rates than used cars. Lenders see new cars as less risky because they're worth more relative to the loan amount. A buyer who qualifies for 6% on a new car might get 8–9% on a used car from the same lender.
A "good" rate in 2026 is generally below 7% for new cars and below 9% for used cars, assuming you have good credit. Anything above 12% should prompt you to work on your credit or shop more lenders.
Credit unions consistently offer lower rates than dealerships or traditional banks. Check your local credit union before shopping at a dealership. Online lenders like LightStream, PenFed, and Autopay are also competitive. Always compare at least 3 lenders before accepting any offer.
Dealer financing can be convenient, but dealers markup the interest rate they receive from lenders. If a bank approves you at 6%, the dealer might offer you 7.5% and pocket the difference. Always compare the dealer's offer with your pre-approved rate.
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