How much interest is paid on a car loan on average?

I’m always on top of my finances. I want to get a car loan, but I’m concerned about paying too much interest. What’s the average amount of interest paid on a car loan?

Answer
The average interest paid on a car loan is almost impossible to calculate. That’s because the interest paid over the life of the loan depends on the loan length, interest rate, and the amount borrowed. Because of the many variables, deducing an average rate isn’t a fair way to ascertain how much you might pay in interest.
Instead of worrying about the average amount of interest paid, focus your efforts on the other factors. In general, you should be fine if you follow these tips:
  • Shop around to get the best rate
  • Choose a shorter loan term to avoid paying more interest
  • Make a larger down payment
  • Shop around some more
With any luck, you can find a lender that minimizes your interest payments so you have more money for the more important things in life.
With that said, don’t let extra savings float out the window. Instead, look to your car insurance policy as a potential source of cash. Download the Jerry app today to compare prices from dozens of insurers.
As a licensed broker, Jerry helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!
Eric Schad
Answered on Dec 14, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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