What is the average car loan APR?

I’m shopping around for a car loan on a Toyota Highlander, but I’m not sure what a good APR is. I don’t want to overpay on my car loan. How high is the average car loan APR?

Answer
A new car is an exciting investment! Unfortunately, learning about car loans and average APRs isn’t nearly as fun as actually buying the car. But try not to worry—looking for the information is half the battle!
It’s hard to determine exact average APRs since they depend on so many factors, but these are the average APRs based on credit scores for November 2021:
  • 300-500: 14.59%
  • 501-600: 11.03%
  • 601-660: 6.61%
  • 661-780: 3.48%
  • 780+: 2.34%
Remember, your APR will depend on your lender and your overall loan application. Aside from credit score, your lender will take these factors into account when setting your APR:
  • Credit history
  • Debt-to-income ratio
  • Income
  • Loan term and loan balance
The lender weighs each of these factors separately to determine a car loan APR. However, credit score and the length of the loan are usually the most crucial aspects of getting a car loan.
Since loan-term plays a big role in the APR, you also have some control in setting it! In general, longer terms mean you’ll pay more interest, but your monthly payments will be lower. Alternatively, shorter terms mean you’ll pay less in interest, but your monthly rates will be higher. The best option will depend on you and your personal circumstances!
If you’d like some extra cash to make your monthly payments, start saving on car insurance with Jerry. A licensed broker, the Jerry app helps you compare personalized quotes from over 50 top providers like Progressive and Allstate in minutes. When you find a better rate, Jerry can help you switch policies and even help cancel your old one!
Eric Schad
Answered on Nov 11, 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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