Is an 8% interest rate good for a car loan?

I have been shopping for a car loan here and there because my old car died. The best I can find is an 8% interest rate. Is this good?

Answer
If your credit score is in the 600 to 660 range, a car loan with an interest rate of 8% is good!
However, if your score is higher, then an 8% interest rate is on the expensive side.
The average interest rate on a 60-month car loan as of September 2021 is 3.81%. So, an 8% interest rate is high by comparison.
To help calculate what you should be paying for your credit score, here are the averages for super-prime and subprime credit scores:
  • Borrowers with super-prime credit (780+) can get a loan as low as 2.34%
  • While deep subprime borrowers (500 or less) have an average interest rate of 14.59%
If you’re approved for a car loan, don’t forget about your car insurance. Lenders require financed cars to have full coverage car insurance, so make sure to check out the Jerry app to compare quotes from over 50 top insurers so you get the best rate.
Eric Schad
Answered on Oct 25, 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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