Average Auto Loan Rates in 2025: New, Used & Credit Scores

As of Q1 2025, the average auto loan interest rate sits at 6.73 % for new vehicles and 11.87 % for used, according to Experian’s latest market snapshot. Borrowers with excellent credit often see something closer to 5 % on a new ride or 7 % on a gently-used model, while shoppers in the poor-credit bracket may face 14–20 % or more. Because lenders adjust pricing every time Treasury yields or the Fed shift, treat these figures as a reference line—your personal offer could land a few points higher or lower depending on credit profile, loan term, and down payment.

Knowing where the averages fall arms you with real bargaining power: you can spot an inflated quote in seconds, budget confidently, and even plan a refinance strategy before you sign. In the sections that follow we’ll break down today’s rates by new versus used, credit-score tier, and term length, show sample monthly payments, and lay out field-tested tactics to shave hundreds—or thousands—off the total cost of your next car. Let’s make sure the only thing accelerating is the vehicle, not the interest you pay.

How the 2025 Auto Loan Rate Benchmarks Are Compiled

The averages you see quoted in news stories don’t come out of thin air. Analysts pull millions of anonymized loan records from Experian’s State of the Automotive Finance Market, cross-check them with the Federal Reserve’s G.19 Consumer Credit file, and then compare the results with rate tables published by consumer sites like Bankrate and NerdWallet. Each source reports an average APR, not just the stated interest rate, so origination fees and dealer mark-ups are baked into the final number—making APR the apples-to-apples figure you should watch.

Because every dataset weighs regions, lender types, and credit tiers differently, you’ll notice slight discrepancies. Think of the national average as a midpoint, not a fixed rule.

Key Terminology to Understand

• APR: All-in borrowing cost, including fees
• Interest rate: The base percentage charged on the principal
• Money factor: Lease equivalent of an interest rate (money factor × 2400 = APR)
• Loan-to-value (LTV): Loan amount ÷ vehicle value; higher LTV usually means higher APR
• Term length: Number of months you have to repay—commonly 36–84

Why Averages Differ by Source

Experian’s dataset skews toward franchised-dealer loans, so its used-car figure lands at 11.87 %. The Fed’s broader mix includes prime-heavy credit-union portfolios, pulling its composite rate a bit lower. Captive lenders, regional pricing, and the share of subprime borrowers can all move the headline number by half a point or more.

Average Auto Loan Rates for New Cars in 2025

Shopping for a factory-fresh vehicle? Here’s where average auto loan rates are landing right now. Remember, these numbers are national medians pulled from Experian and Bankrate snapshots; individual lenders will price a little higher or lower.Term (months)National Avg APRSuper-Prime (781–850)Deep Subprime (≤500)366.20 %4.50 %14.50 %486.50 %4.75 %15.00 %606.73 %5.25 %15.84 %727.10 %5.60 %16.40 %847.40 %5.90 %17.10 %

Rates creep up as the term stretches because lenders take on more depreciation risk the longer you borrow. Flip that around and you’ll see an automatic discount of roughly 0.25 – 0.50 percentage points every time you lop a year off the repayment schedule.

Example Monthly Payments on a $35,000 New Vehicle

Scenario APR Term Monthly Payment Total Interest

Average 6.73 % 60 mo $689 $6,310

Good credit 5.25 % 60 mo $666 $4,960

Fair credit 9.50 % 60 mo $735 $9,100

Average 6.73 % 72 mo $591 $7,552

Good credit 5.25 % 72 mo $567 $5,824

Fair credit 9.50 % 72 mo $639 $11,008

The takeaway is stark: bumping your score into the next tier or trimming the term by a year can save four figures in interest, even on a mid-priced sedan or crossover.

How Manufacturer Incentives Can Beat the Average

Automakers occasionally throw out teaser rates—0 %, 1.9 %, or 2.9 % for 36 or 48 months—through their captive finance arms. Qualifying usually demands super-prime credit and a late-model purchase, and you may have to forfeit a cash rebate or limit the term to 48 months or less. Run the math: sometimes taking the rebate and financing through a credit union at 5 % nets the lower total cost. Either way, these promotions set a ceiling for what you should accept from a third-party lender.

Average Auto Loan Rates for Used Cars in 2025

If you’re shopping pre-owned, brace for a bigger finance charge. Experian’s first-quarter data puts the overall average used-car APR at 11.87 %, almost five full points above the new-car figure. Older vehicles carry more mechanical risk and depreciate faster, so lenders widen the spread between excellent and poor credit far more aggressively on the used side. Here’s where the market is hovering right now:Term (months)National Avg APRSuper-Prime (781–850)Deep Subprime (≤500)3611.00 %7.20 %19.00 %4811.30 %7.50 %20.00 %6011.87 %7.80 %20.90 %7212.40 %8.20 %21.40 %8412.90 %8.50 %22.00 %

Notice how the gap between super-prime and deep-subprime borrowers balloons to 12-plus points on longer terms. That spread is double what we saw in the new-car table, underlining why improving your credit score (or shortening the loan) matters even more when you’re buying used.

The Mileage & Model-Year Surcharge

Every lender publishes a rate sheet with tiered “add-ons” tied to age and mileage. A late-model 2023 crossover might qualify for the base 60-month rate you see above. Push back to a 2016 sedan with 110 k miles and the same bank will often tack on 1–3 percentage points. At 11.87 %, that bump translates to roughly $14 extra per month on a $22,000 loan—small at first glance, but nearly $900 in additional interest over five years.

Term (months) National Avg APR Super-Prime (781–850) Deep Subprime (≤500)

36 6.20 % 4.50 % 14.50 %

48 6.50 % 4.75 % 15.00 %

60 6.73 % 5.25 % 15.84 %

72 7.10 % 5.60 % 16.40 %

84 7.40 % 5.90 % 17.10 %

Even on a mid-priced used car, shaving just 3-4 points off the rate—or choosing a 48-month term instead of 60—can keep nearly $2,000 in your wallet. Use these numbers as a gut-check when the finance manager slides a payment sheet across the desk.

Auto Loan Rates by Credit Score Tier

Your credit score is still the single biggest lever you can pull to move your auto-loan APR. The table below lines up the most recent Experian Q1-2025 figures so you can see, at a glance, how average auto loan rates jump every time your FICO range drops a notch.Credit TierFICO RangeAvg APR ‑ NewAvg APR ‑ UsedSuper Prime781 – 8505.25 %7.80 %Prime661 – 7806.85 %9.70 %Near-Prime601 – 6609.50 %14.20 %Subprime501 – 60012.90 %18.50 %Deep Subprime300 – 50015.84 %20.90 %

Each ~20–30-point climb in your score can shave a full percentage point—or more—off the APR, which snowballs into hundreds of dollars saved on interest for even a modest loan.

“What’s a Good Rate?” Benchmarks

• Is 7 % a good auto-loan rate in 2025?
  
  • For a new car, 7 % is on par with the Prime average, so it’s decent if your score sits in the high-600s.
  
  • For a late-model used car, 7 % actually beats the Super-Prime average—lock it in if you qualify.
• Is 10 % high?
  
  • On a new vehicle, 10 % lands in Near-Prime/Subprime territory; you’ll want to shop other lenders or improve credit.
  
  • On a used vehicle, 10 % is slightly above the Prime average but still well below the overall used-car mean of 11.87 %.

Rule of thumb: offers that sit within ±2 % of your tier’s line in the table are reasonable; anything outside that spread merits negotiation or a second quote.

How to Estimate Your Rate Before Applying

1. Pull your FICO Auto Score (it ranges 250–900) through your bank or a free credit-monitoring app.
2. Match the score to the tier above to find your ballpark APR.
3. Adjust ±0.25 % for every 12 months you shorten or extend the term, and another ±0.50 % depending on down payment size and lender type (credit unions often price lower).

Do this math before you walk into the dealership and you’ll know, within a few dollars, what your monthly payment should look like—and whether the finance manager’s “deal” is really a deal at all.

Other Factors That Can Raise or Lower Your Rate

Credit score grabs the headlines, but lenders crunch a half-dozen other numbers before they spit out an APR. Understanding each lever helps you nudge the offer closer to (or even below) the current average auto loan rates.

Down Payment, LTV & Vehicle Collateral

Put 20 % down and keep the loan-to-value ratio under 90 % and most banks shave 0.25–1.00 percentage points. Newer, high-resale models—think Toyota RAV4 versus a 12-year-old luxury sedan—also score lower risk premiums.

Where You Finance: Banks, Credit Unions, Online Lenders, Dealerships

Credit unions typically price about 1 % below big banks, while online fintechs land somewhere in between. Dealership finance offices can beat everyone when they tap “buy rates” or captive-lender incentives, but always ask to see the worksheet.

Economic Climate & Fed Policy

Auto APRs track the prime rate, which in turn lags the Federal Funds Rate by roughly one billing cycle. If the Fed signals cuts, locking a short-term rate-lock or waiting 30–60 days can pay off.

Co-Signers, Debt-to-Income Ratio, and Employment Stability

Adding a co-signer with stronger credit, keeping your debt-to-income ratio under 40 %, and showing two years of steady employment each lower default risk. In practice, expect a 0.25–0.75 point discount when these boxes are checked.

Loan Term Length vs. Interest Rate Trade-Offs

Before you fixate on a low monthly payment, remember that loan term and APR move in opposite directions. Lenders reward shorter payback windows with cheaper money because their risk of default and depreciation shrinks. Stretch the contract and the rate—and total interest—balloons.

Short Terms: Higher Payment, Lower Rate

• Typical discount: ≈ 0.25–0.50 percentage points for every 12 months you shave off.
• On a $30,000 new-car loan, cutting from 72 mo at 7.1 % to 48 mo at 6.5 % bumps the payment from $511 to $715, yet slashes interest by about $2,000.
• Equity stays positive sooner, making it easier to sell or trade early.

Long Terms: Lower Payment, Higher Rate & Negative Equity Risk

• Payments drop—sometimes below a lease—but the APR rises and interest snowballs.
• That same $30,000 spread over 84 mo at 7.4 % looks friendly at $458 a month, yet racks up more than $6,200 in finance charges and can leave you underwater for years.

Deciding on the Optimal Term

Ask yourself:

1. Can I comfortably handle the 60-month payment at today’s rate?
2. Do I plan to keep the car longer than the loan?
3. Will a larger down payment let me shorten the term?

If you answer “yes” to two of the three, a shorter term is usually the smarter financial play.

Strategies to Secure the Best Auto Loan Rate in 2025

Finding money that beats the average auto loan rates isn’t about one magic hack—it’s a sequence of small moves that add up. Work these steps in order and you can walk into any showroom knowing the lender, not you, is giving up margin.

Check & Boost Your Credit 30–60 Days Before Applying

Pull your FICO Auto Score, then tackle quick wins:

• Pay down credit cards to under 30 % utilization
• Dispute errors and outdated negatives
• Pause new credit inquiries until the loan closes

Even a 15-point bump can knock 0.5 % off your quoted APR.

Gather Rate Quotes from at Least Three Lenders

Treat loan shopping like car shopping: compare. Use a credit union, an online lender, and your primary bank. Multiple auto inquiries within a 14-day window count as one hit on your credit file, so you won’t harm your score by rate-hunting aggressively.

Pre-Approval vs. Pre-Qualification

• Pre-qualification: soft pull, ballpark rate, no commitment
• Pre-approval: hard pull, firm offer good for 30–60 days

A pre-approval is bargaining power; it sets a ceiling the dealer must beat or match.

Negotiate With the Dealership Finance Office

Ask for the “buy rate” the lender offers the dealer, then request the markup cap (often 2 %). Slide your competing pre-approval across the desk and let silence work; most F&I managers will shave the spread to keep the sale.

Refinance After 6–12 Months if Rates Drop or Credit Improves

Set a calendar reminder. Once you’ve made on-time payments and your score rises—or the Fed eases—apply to refinance. Use an online calculator to confirm that the interest savings exceed any title or processing fees, then pocket the difference for maintenance or a quicker payoff.

FAQs About Average Auto Loan Rates

Got a quick question? Scan the answers below for bite-size clarity on the most common rate-shopping head-scratchers.

What is the national average auto loan interest rate right now?

Experian’s Q1-2025 snapshot shows 6.73 % for new cars and 11.87 % for used. Treat those as midpoints; prime borrowers generally land lower and subprime higher.

Will auto loan rates go down in 2026?

Forecasts hinge on Federal Reserve policy. If the Fed begins cutting its benchmark rate—as many economists expect in late-2025—consumer auto APRs could drift 0.5–1.0 % lower by mid-2026.

Are credit unions always cheaper than banks?

Not always, but often. Credit-union auto loans average about one percentage point below large national banks thanks to their not-for-profit structure and member-first pricing.

Can I get a used car loan under 5 % in 2025?

Yes, but only with super-prime credit, a late-model vehicle, and usually a shorter 36- or 48-month term—often through a credit union or manufacturer CPO program.

How often do average rates change?

Publishers update averages quarterly, yet individual lenders tweak rate sheets weekly. Check fresh quotes within 30 days of signing to avoid surprises.

Key Takeaways on 2025 Auto Loan Rates

• Average auto loan rates are 6.73 % for new cars and 11.87 % for used; borrowers with super-prime credit can score ≈5 % and 7 % respectively, while deep-subprime shoppers may face 15 %-plus.
• The three biggest levers you control are credit score, down payment, and lender shopping. Raising your FICO tier even one notch, putting 20 % down, and collecting three competing quotes can shave multiple points off your APR.
• Loan term matters: every 12 months you shorten the contract typically drops the rate 0.25–0.50 % and cuts thousands in total interest.
• Credit unions, promotional captive financing, and timely refinancing are still the easiest ways to beat the national averages.

Ready to see how low your payment can go? Check today’s financing offers and browse inventory at Certified AutoBrokers to lock in a rate that leaves more gas money in your budget.