Rates on car loans are impacted by four factors: credit score, length of the loan, lending institution, and whether the loan is for a new or used car. It's possible that drivers in La Porte often go into debt when purchasing a car without fully understanding the loan process, or even knowing what is the average rate on a car loan. We break these factors down for you below so you can tell what is a good car loan rate and what isn't. For additional help, the Finance Department at Bayway CDJR in Pasadena will be happy to walk you through your options.

Your Credit Score

Having a good credit score is an important factor in getting a good interest rate for a car loan. If your credit score isn't great, there are easy ways to improve a credit score. Pull a detailed credit report to see what issues are negatively affecting your credit. It could be something as simple as an old utility bill you forgot about, or it could even by a mistake. If you can get those issues cleared up, that can improve your credit score.

Average rates on a car loan by credit score (60 months, new car):

  • 500-589: 15.24%
  • 590-619: 14.06%
  • 620-659: 9.72%
  • 660-689: 7.02%
  • 690-719: 4.95%
  • 720-850: 3.6%

Length of the Loan

The difference in rates depending on the length of a loan isn't quite as drastic as the differences in credit score, but there is still a difference. Generally, the longer the term, the higher the average rate on a car loan. The difference generally varies by about 0.2% between a 36-month loan and a 60-month loan.

Lending Institution

Many Humble car buyers are surprised to find that interest rates are not standard across the industry. Rates between lenders can vary as much as 17% or more. Fortunately, the finance department at most dealerships work with multiple lenders, so they can find the best rate for you.

New vs. Used Car

Lenders typically give lower rates for loans on new cars as opposed to used cars. That's because there's less risk on a loan for a new car as used cars have a higher risk of total mechanical failure.

Apply for Financing at Bayway CDJR

You don't have to figure out what is a good car loan rate on your own. The Finance Department at Bayway CDJR will work with you to find a good rate. Learn the difference of financing with a dealership or a bank, and if financing isn't the best option for you at the moment, we can walk you through your leasing options. We're conveniently located near Pearland, stop in today!