Interest rates are continuously fluctuating, with the average interest rate for a new car loan being 6.35% in the second quarter of 2026, according to Experian. Here, we'll look at the average interest rates for new or used cars based on the latest data available. It's important to understand interest rates, especially if you have bad credit, to see how they'll affect your car loan and find the best option for you.
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 Q2 2026 was 6.35% APR for all credit types, which is down slightly from the 6.79% rate in Q2 2025 and down even more from 2024's Q2 rate of 6.85%. The average rate for used cars is 11.19% (down from 11.57% a year ago, and from the 12.12% 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 9.71%. With a VantageScore of 501 to 600, it is about 13.52%. For those with a credit score under 500, the rate is around 16.11%.
Average New Car Loan Rates
For new cars, rates run from 4.41% (Super Prime) to 16.11% (Deep Subprime) as of Q2 2026.
Here are the new car loan rates by average credit score range:
- Super Prime – 4.41%
- Prime – 6.15%
- Near Prime – 9.71%
- Subprime – 13.52%
- Deep Subprime – 16.11%
When compared to Q2 2025, the average interest rates for Super Prime and Prime actually decreased, while Near Prime rates stayed the same. Deep Subprime and Subprime rates increased, but that was consistent with what was expected. We predicted higher prices and interest rates last summer in light of tariff turmoil and economic uncertainty. Although the 25% tariff on imported vehicles didn't completely shake the automotive world, it still drove up yearly prices and decreased availability from some foreign automakers.
Average Used Car Loan Rates
As of Q2 2026, the used car rate range is between 6.29% (Super Prime) and 21.62% (Deep Subprime).
- Super Prime – 6.29%
- Prime – 8.81%
- Near Prime – 13.93%
- Subprime – 19.10%
- Deep Subprime – 21.62%
The rates reflected here are down year-over-year across the board, with prime and super prime rates falling the most, by 0.15% and 0.14%, respectively.
New Car Rates
- Super Prime 4.41%
- Prime 6.15%
- Near Prime 9.71%
- Subprime 13.52%
- Deep Subprime 16.11%
Used Car Rates
- Super Prime 6.29%
- Prime 8.81%
- Near Prime 13.93%
- Subprime 19.10%
- Deep Subprime 21.62%
A higher credit score means a lower interest rate, which can save you thousands of dollars over the life of your loan.
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.
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. Information regarding your credit tier, determined by your credit score, is available as well. At the time of this writing, the most current rates available are from Experian's State of the Automotive Finance Market report from the second quarter of 2026. Rates for the third quarter of 2026 haven't been released yet.
The Bottom Line
Individual rates vary significantly by credit tier. If you have a credit score below 660, we recommend working with a subprime-specialist lender to find the most suitable car loan. 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 skilled lender who's able 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, Q2 2026
