Is 8.2% APR a good rate for a used car if I have no credit?

I'm looking to buy my first car, but I have no credit history. I applied to my local bank and they gave me a rate of 8.2%, citing our long-lasting relationship. Is this a good rate?

Apr 27, 2021
Answer provided by
Eric Schad
Answered at Apr 27, 2021
“In all actuality, 8.2% is a great rate considering you have no credit and it’s a used car. Most banks and lenders won’t work with you at all until you’ve built up some credit history.
That said, how long is the term? You probably shouldn’t finance a used car for more than 60 months if you can avoid it. If this loan is more than 60 months, you may think about refinancing at some point in the next few years.
You can also look at credit unions, as sometimes these nonprofit institutions have better rates than banks.
And before you sign on the dotted line, have you thought about other expenses? You still need to budget for an emergency fund, gas, and car insurance, so keep that in mind.”
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