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?

Answer
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.
Lauren Smith
Answered on Nov 18, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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