what are car interest rates

Car interest rates refer to the percentage of the loan amount that you pay to the lender each year, and it is the cost of borrowing money. The interest rate you receive is based on several factors, such as your income, credit history, and credit score. Generally speaking, the higher your credit score, the lower your car loan interest rate is likely to be. The average auto loan interest rates across all credit profiles range from 5.07% to 14.18% for new cars and 7.09% to 21.38% for used cars. According to Experian’s most recent State of the Automotive Finance Market report, the average auto loan interest rates across all credit scores are 6.63% for new cars and 11.38% for used cars. However, the rates can vary depending on the lender, the term of the loan, and the type of vehicle you choose to finance. It is important to compare the APRs, which include the interest rate along with the fees and other costs that come with the loan, when comparing loan offers.