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What is the APR for car loans?
I’m confused by the APR numbers on car loans. What does it mean? Is a lower number better?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Finance terms and car loans are confusing, so don’t feel bad about not understanding them! The APR (or the Annual Percentage Rate) on a car loan represents what you’ll pay in interest and additional fees each year. The lower the number, the less expensive your car loan will be.
In general, 2.49% is considered a good APR. However, your credit score typically dictates the APR you receive. If you have good credit, you can expect an APR between 2.34% and 5.49%. If your credit score is low, you may see an APR of 20% or higher.
If you’re worried that your credit score will negatively impact your loan, you can try to find a cosigner with excellent credit to get better terms and a lower APR.
When you apply for your new car loan, you’ll usually need to show proof of insurance, too. The
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app makes it quick and easy to find the best rates available on the insurance coverage you want! Just download the app and answer a few questions to see a comprehensive cross-analysis of the best car insurance policies from providers like Allstate, Nationwide, and Progressive.MORE: How to get a cosigner for a bad credit car loan
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