Is 4.99% a good car loan rate?

I was applying for new car loans and the best rate I found was 4.99%. I have a 750 credit score, no debt, and a steady income of $5,000 a month. The car I want to buy is $25,000. Is 4.99% a good APR?

Answer
Shopping around for a car loan is a brilliant idea! As far as a 4.99% rate, it might be a good deal, but the rate depends on several factors.
When a lender reviews your application, they analyze a few important factors:
  • Credit score
  • Your income
  • Debt-to-income ratio
  • Loan term and amount of the loan
Since you have no debt, good credit, and steady income, you’re already a solid applicant. You should have your choice of lenders willing to work with you.
As of November 2021, the average new car loan rate for someone with your profile is 3.48%. To that effect, a 4.99% interest rate is a bit on the high side. So, keep shopping around, and you should find something better.
And since you’re financing a new car, don’t forget that lenders require full coverage car insurance. But just like your car loan rate, you can avoid overpaying by shopping around.
Jerry can help. Download the Jerry app today to compare quotes from dozens of brand-name insurers to get the best rate possible for your new car.
Eric Schad
Answered on Nov 09, 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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