The 3 Worst States to Finance a Car

Alaska, Montana and New Mexico rank among the three states with the highest car financing interest rates.
Written by Allison Stone
Reviewed by Kathleen Flear
Are you shopping around for a new car? It’s a tough market right now—automakers are struggling to keep up with demand for cars, and inflation is raising prices across the board.
Financing
can be the key to getting the car of your dreams, but not all financing plans are created equal.
Another option to save could be buying a used car, but high interest rates in your state might make it not worth the couple thousand you save off the ticket price. For some car-buyers, high financing rates are worth it. Many consumers right now are even choosing to borrow more money for longer periods to secure the car they want. 
So how do you get the best possible deal on your financing plan? If you’re in one of these three states with the highest rates, you’ll want to be extra diligent when it comes to securing a financing plan. 

The states with the worst financing rates for cars

When it comes to financing a used car, Alaska, Montana and New Mexico lead the pack with the highest APR rates across the board. 
In Alaska, financing a used car is going to cost you 13.79% on average. For a new car, however, things are a bit better with an average APR of just 5.26%. Alaska is still up there for new cars, but you’re going to have a much easier time financing a new car. 
In Montana, it’s a similar situation. Used cars have an average APR of 10.54%, but a new car is only going to cost you about 3.59% APR, a slightly lower rate than almost half the nation. 
New Mexico has an average used car APR rate of 10.52%, and unfortunately investing in a new car isn’t going to help much. At 6.32%, new cars in New Mexico have the highest average financing rate of anywhere in the country. 
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Why financing is so expensive in some states

The cost of financing and car insurance overall depends on many different variables, but in many instances it's a mere matter of location and accessibility
In states like Alaska and Wyoming where navigating mountains, inclimate weather and treacherous terrain come standard, consumers pay 20% more overall just on the base price of a used car because demand is so high. 
Average financing rates also tend to run higher in states where SUVs and trucks are the most popular cars to drive, because those cars are simply more expensive upfront than the typical compact car a city dweller might have. 
In general, mountain states, states with high sales tax or states where demand for cars is high tend to have higher financing rates overall. 

How to get the best deal on car financing

Are you struggling to pay off your current car loan? Refinancing could be the key to save you money on interest rates and reduce your monthly payments. 
Sign up with the
Jerry
app to find out how to save on car insurance and get the best deal possible on your
auto loan
. Jerry’s loan comparison tool can determine if you’re getting the best deal for the best terms. The AI-based app analyses your current loan and quickly and accurately comparison shops for you, saving you the time and hassle of making those phone calls yourself. 
Whether or not you decide to refinance, you can always save money on your car insurance plan. Jerry generates multiple quotes from top providers in just 45 seconds. The average Jerry user saves over $800 a year on their car insurance plan!
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