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?"

Answer
“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.”
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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.
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