What's a good APR for a first-time car buyer with limited credit history?

"My credit score is 740, but I don't have any installment-loan credit history.

I want to buy a new car for $23,000 with $4,000 down. I was quoted a rate of 6.74%.

Is this a good APR?"

“Because you have limited credit history, you’re probably going to have a higher interest rate than seasoned buyers.
You don’t list how many months your car loan is for, but 6.74% doesn’t seem like a terrible rate if you’re going with a 72-month term.
If possible, you should try to increase your down payment to 20% ($4,600). Twenty percent is the magic number that can lower your interest rate.
In the future, if you can’t put 20% down, you probably should wait to buy a car until you can—then watch your interest rate drop.”
Eric Schad
Answered on Jun 09, 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.

Did this answer help you?

Ask us a question by email and we will respond within a few days.

Have a different question?

You can meet us at our office and discuss the details of your question.
Let Jerry’s experts help you find savings on your car insurance!
No long forms or spam · Get quotes from 40+ carriers
Find insurance savings (100% Free)
4.7/5 Rating on App Store