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Is 6 percent a good interest rate on a 60-month car loan?

I've been shopping around for a 60-month car loan and the best rate I've been offered is 6%. Is this a decent rate?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Whether or not a 6% interest rate on a
car loan
 is good or bad depends on the following:
  • Credit score
  • Income
  • Debt-to-income ratio
Overall, the average interest rate on a 60-month car loan is 3.81%. Comparatively, a 6% interest rate is high. For further context, here are the averages for super-prime and subprime credit scores:
  • Borrowers with super-prime credit (780+) can get a loan with
    APR
     as low as 2.34%
  • Borrowers with subprime credit (500 or less) have an average interest rate of 14.59%
Our advice is that if you have a decent credit score, it may be worth it to keep shopping around for a better interest rate—otherwise, you’ll be paying way more interest than you need to over the course of your loan.
If you decide to move ahead with a car loan, make sure you shop around for
car insurance
 as well. Many lenders require financed vehicles to be fully covered as a condition of your loan.
MORE: How to calculate car loan payments
Car LoansAPRCar Financing
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