What is a Good Interest Rate for Your Car Loan?

Man Sitting at Desk Doing Calculations

 

Even if your credit score is lacklustre, and you aren’t expecting a good rate, it’s important that you know what a fair rate is given your credit score, so that you can avoid overpaying. If Oakville drivers are unsure how what rate best corresponds with their credit score, they can consult the chart below. Be sure to keep reading for a break down of how to negotiate for the best rate that you can get, as well as for information on what the average interest rate for a car loan is. If you have any questions, be sure to reach out to the Mercedes-Benz Burlington finance department!

Average Credit Score for New Car Annual Percentage Rate Average Credit Score for Used Car Annual Percentage Rate
781-850 3.17% 781-850 3.8%
661-780 4.03% 661-780 5.48%
601-660 6.79% 601-660 10.1%
501-600 10.98% 501-600 16.27%
300-500 13.76% 300-500 19.32%

How Do You Get the Best Interest Rate?

To get the very best interest rate that you can, Milton drivers should check their credit score in advance. Then look at the chart above to determine what the average interest rate on a car loan is for that score. Be sure to take note and bring that information to the negotiating table. If your score is lacklustre because of a business loan or another reason that doesn’t necessarily reflect your behaviour as a spender, and you can prove that you make timely payments or have records of other positive financial behaviour, be sure to bring proof. So, what is a good interest rate on a car loan? Anything better than the average listed above given your credit score.

What is the Average Interest Rate on a Car Loan?

The average interest rate on a three-year car loan is 3% to 4.5%. Remember that this is an aggressive loan term, and the interest rate you get may vary depending upon your own financial history.

Get Flexible Financing at Mercedes-Benz Burlington

Now that Mississauga drivers know what a good rate for your car loan is given your credit score and what the average interest rate on a car loan is, give Mercedes-Benz Burlington a call at 877-557-3007. We’ll make sure you get a contract that works for your needs and budgets, and totally fair. If you have other questions about car financing, be sure to explore our site for informative reads about trading-in a car for credit and how to sell your car to a dealership!

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