This option will reset the home page of Loan Advices: You Ask – We answer | All About Loan Issues restoring closed widgets and categories.

Reset Loan Advices: You Ask – We answer | All About Loan Issues homepage

What is the standard interest rate for a car loan?

Jessica B asked:

I am just curious as to what most banks do when charging interest on a car loan.

Is it prime plus 2%? Is it prime plus 3%? I understand that it would depend on if you’re looking for a fixed or variable interest rate, but I’m just curious as to the percentage for either.
The length of term I am looking at is about 5 years (60 months) and my credit is pretty good. I should have also mentioned I’m Canadian so prime right now is 2.5%.
Asked on: 2012-11-24 20:36:32

4 Comments

  1. They are almost always fixed rate loans so although they might use prime as a reference, the rate won’t be variable. Typical car loans right now are about 6.9% for new cars and 8-9% for used.

  2. interest rate on auto loans varies according to:
    1. the credit worthiness of the borrower
    2. the model year of the vehicle being purchased
    3. the term of the loan (length of time being financed)
    4. the lending institiution
    each bank has it’s own formula for determining rate.

  3. t3h2 says:

    I have been offered car loans ranging from 7% to a stupidly high 56% from various companies.

    the best idea is to speak with your bank and see what they can offer you, or do what i did and save for a few months and just buy with cash.

  4. Fedrik T says:

    Generally the companies offer interest rates on the basis of
    1. Credit Score
    2. Down payment amount
    3. Loan term

    When i applied for the loan the application form asked for all these above and based on that they offered me the loan amount with their interest rates.
    But as i opt for used cars they offered me really low interest rates. So going on the try out here from where i took a loan.

Leave a Reply

You must be logged in to post a comment.