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What is a good car loan interest rate for a 2016 car?
I want to buy a used car—specifically, a 2016 Honda Civic. What is a good car loan interest rate for a 2016 car?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
A good car loan interest rate is usually around 5%.
Used car interest rates tend to be higher than new car interest rates. This is because a car’s value depreciates quickly. So, the borrower may need more money to buy a used car than the car is actually worth, which is risky for the lender.
However, generally speaking, loan interest rates are more heavily dependent on an individual applicant’s credit score than the age of the vehicle they’re purchasing. The average interest by credit score is as follows:
- 781-850: 3.7%
- 661-780: 5.5%
- 601-660: 10.5%
- 501-600: 17%
With a bad or poor credit score between 300 and 500, you will either need a cosigner or large down payment to get approved for a loan.
If you are unhappy with the interest rate you qualify for, don’t worry. You can still purchase a vehicle now, then refinance into a lower-interest loan after making several on-time payments and improving your credit score. Refinance quickly and easily through the
Jerry
app. On average, those who refinance pay $85 less every month.View full answer
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