The short answer
A good APR is anything at or below the average for your credit tier. In Q4 2025, new-car loans averaged 6.37% and used 11.26%, per Experian. Super-prime buyers (781+) saw about 4.77% new; subprime buyers (501–600) about 13.17%. Beat your tier's average and you have a good rate.
What are the average car loan APRs right now?
As of Q4 2025, the national average is 6.37% for new cars and 11.26% for used, according to Experian. Used-car rates run higher because older vehicles are riskier collateral. These averages are your starting benchmark, but your actual rate depends almost entirely on your credit score and the loan term.
Because rates shift with the broader market, always compare a quote against the most current average rather than an old rule of thumb. The split between new and used is consistent: expect used-car APRs to land several points above new-car rates for the same borrower.
What is a good APR for my credit score?
Your credit tier sets the bar. In Q4 2025, super-prime borrowers (781+) averaged 4.77% new and 7.67% used, while subprime borrowers (501–600) averaged 13.17% new and 19.42% used. A "good" rate is one that meets or beats the average for your specific tier — comparing yourself to the overall average is misleading.
| Credit tier (score) | New-car APR | Used-car APR |
|---|---|---|
| Super prime (781+) | 4.77% | 7.67% |
| Prime (661–780) | 6.89% | 10.12% |
| Nonprime (601–660) | 9.83% | 14.07% |
| Subprime (501–600) | 13.17% | 19.42% |
| Deep subprime (≤500) | 15.43% | 21.55% |
These tier averages come from Experian's Q4 2025 data. If you don't know your score, pull it before you shop so you can judge any quote against the right benchmark.
How do you know if a quoted rate is fair?
Compare it to the average for your tier, not the headline number. If your score puts you in the prime band and the new-car average is 6.89%, a 7% offer is fair while a 10% offer is not. A rate well above your tier average is a signal to shop other lenders before signing.
- Know your credit score and the matching tier average before you negotiate.
- Treat any quote more than a point or two above your tier average as negotiable.
- Watch the term: a low payment can hide a high APR stretched over 72–84 months.
- Read the full car financing terms so the APR, not the payment, drives your decision.
How can you get a lower car loan APR?
Shopping multiple lenders is the highest-leverage move — borrowers who compare offers save an average of about $2,346 over the life of a loan. Beyond that, raise your credit score, put more down, choose a shorter term, and get pre-approved before you visit the dealer so you negotiate from a real rate.
- Get pre-approved from a bank or credit union first — see how to get pre-approved.
- Compare at least three offers; the spread between lenders is often wide.
- Improve your score and lower your debt before applying when you can.
- Keep the term short and the down payment high to cut total interest.
The LendingTree study behind that savings figure underscores the point: the dealer's first offer is rarely the lowest rate available to you.
Frequently asked questions
What credit score do I need for a good car loan rate?
A score of 661 or higher unlocks meaningfully better rates. Prime borrowers (661–780) averaged about 6.89% on new cars in Q4 2025, and super-prime borrowers (781+) about 4.77%. Below 661, rates climb steeply, so improving your score before applying pays off directly in the APR you're offered.
Is 8% APR on a car loan too high?
It depends on the loan and your credit. With the new-car average at 6.37% in Q4 2025, 8% is high for a new car if you have prime credit, but reasonable for a used car or a nonprime borrower. Compare 8% against the average for your exact credit tier, not the headline number.
Should I accept the dealer's financing or get my own?
Get your own pre-approval first, then let the dealer try to beat it. Dealers can mark up the rate they pass on from a lender, and shopping multiple lenders saves an average of about $2,346 over the life of a loan. Use the dealer's offer only if it genuinely undercuts your pre-approval.
How can I get a lower car loan interest rate?
Raise your credit score, put more money down, choose a shorter term, and get pre-approved from several lenders before shopping. Each step lowers either your risk to the lender or the amount financed, and comparing offers from banks and credit unions is the most reliable way to find the lowest APR.
Sources
CarsLens is editorial guidance, not individualized advice. This page draws on Experian and LendingTree.