What is the Average Interest Rate on a Car Loan?

Why is the Average Car Loan Interest Rate Important?

Average auto loan interest rates are important because they tell you about how much you can expect to pay to borrow the money you need for a vehicle. Interest is the cost of borrowing, and it's expressed as a percent. Interest charges accrue daily based on the amount of your loan balance. The higher your interest rate, the more you pay for a vehicle loan overall.

Current Average Car Loan Interest Rates

According to Experian, the average interest rate for a new car loan through Q3 2025 was 6.56% APR for all credit types, which is down slightly from the 6.65% rate in Q3 2024 and down even more from 2023's Q3 rate of 7.11%. The average rate for used cars was 11.40% (down from 11.86% a year ago, and from the 11.59% rate two years ago).

However, that doesn't tell the whole story, particularly for those with bad credit. On a subprime car loan, Experian says the average interest rate for a buyer with a credit score ranging from 601 to 660 (Near Prime) was nearly 9.8%. With a VantageScore of 501 to 600, it was about 13.34%. For those with a credit score under 500, the rate was around 15.85%.

Average New Car Loan Rates

When you're talking about rates for car loans, they can vary widely, depending on whether the car is new or used. When it comes to getting a new car, you're typically looking at lower interest rates compared to used vehicles.

Here are the new car loan rates by average credit score range:

• Super Prime – 4.88%
• Prime – 6.51%
• Near Prime – 9.77%
• Subprime – 13.34%
• Deep Subprime – 15.85%

These average interest rates for new cars were nearly all up in Q3 2025, compared to the prior year. We predicted higher prices and interest rates last summer, and it looks like we were on the nose. In light of tariff turmoil, this was expected throughout the year, when the auto industry was hit with a 25% tariff on imported vehicles. Though the imposed tariffs didn't rock the automotive world as expected, they still drove up yearly prices from some foreign automakers.

Average Used Car Loan Rates

As you can see here, the average interest rate for a used car is much higher than that of a new car. Even though these used car rates are higher than new car rates, in the used car market, interest has fallen across the board.

• Super Prime – 7.43%
• Prime – 9.65%
• Near Prime – 14.11%
• Subprime – 19.0%
• Deep Subprime – 21.6%

The rates reflected here are down year-over-year across the board, with prime and super prime rates falling the most, to 0.60% and 0.61%, respectively.

How Often Do Car Loan Rates Change?

Car loan rates fluctuate constantly. Typically, a year is divided into quarters, and each quarter the rates are presented to the general public, comparing the current rates to the rates in the same quarter of the previous year (and years prior). At the time of this writing, the most current rates available are from Experian's State of the Automotive Finance Market report from the third quarter of 2025. Rates for the fourth quarter of 2025 haven't been released yet.

How to Calculate Your Own Loan?

The simplest way to calculate your auto loan in this day and age is to find a car loan estimator online. These allow you to input your information about income and credit score, to give you an estimate of what you may see if you're approved for a loan. Keep in mind that loan decisions are up to your lender and may not reflect the terms given in an estimator. This is, however, an effective tool for starting to get an idea of what you may need to finance a car.

You can use a car loan estimator, like ours, in conjunction with a payment calculator to figure out where your budget should be.

The Bottom Line

Having said that, specialized lenders can look at other factors to help get you financed. For example, a subprime lender will establish whether or not you have situational bad credit or habitual bad credit. Did a car buyer encounter a life-altering event like a divorce or a job loss? Or is the buyer someone who rarely pays bills on time? These are questions the right lender will ask themselves when they're determining your ability to repay a loan.

While it may seem helpful to know the average APR for a car loan, the fact is that your results will undoubtedly vary based on your unique credit background. If you're looking to get financed, it's important to work with a lender that's skilled enough to look beyond your credit score to help get you into the right car for your budget.

Source: Experian State of the Automotive Finance Market, Q3 2025