Is 1.9% APR A Good Rate On A Car Loan? (2024)

FAQs

Is 1.9% APR A Good Rate On A Car Loan? ›

If you're buying a car with an interest rate of 1.9% APR, you may be getting a good rate. When it comes to manufacturer car incentives on new cars and trucks, financing deals typically start at 0%, followed by 1.9% APR. While there may be lower interest rates available, 1.9% can be a good deal under some circ*mstances.

An APR of 1.9% means you have got an excellent deal, and that you likely have an excellent credit and payment history. The average APR for a new car is 4-5%, so you can consider anything below that as a great deal.

The annual percentage rate (APR) is the cost of borrowing on a credit card. It refers to the yearly interest rate you'll pay if you carry a balance, plus any fees associated with the card. APR often varies by card. For example, you may have one card with an APR of 9.99% and another with an APR of 14.99%.

What is a good interest rate for a 72-month car loan? An interest rate under 5% is a great rate for a 72-month auto loan.

Car Loan APRs by Credit Score

Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used. Poor (450 - 649): 12.84 percent for new, 20.43 percent for used.

The law says that the most a lender can charge for an auto loan are about 16% APR, but some lenders get away with 25% or more. Your annual percentage rate (APR) for a car loan depends on your credit score and whether you want a new or used car.

If you're buying a car with an interest rate of 1.9% APR, you may be getting a good rate. When it comes to manufacturer car incentives on new cars and trucks, financing deals typically start at 0%, followed by 1.9% APR. While there may be lower interest rates available, 1.9% can be a good deal under some circ*mstances.

The APR on a credit card is an annualized percentage rate that is applied monthly. If the advertised APR on a credit card is 19%, for example, then an interest rate of 1.58% will be imposed on the outstanding balance each month. As mentioned, any given credit card may come with several different APRs attached.

Your APR doesn't matter if you pay off your balance each month, thanks to your grace period. The Credit CARD Act of 2009 requires lenders to deliver your bill to you at least 21 days in advance of when it's due. During this time, most lenders offer an interest-free grace period.

Why is my APR so high with good credit? ›

Key takeaways. Your credit card APR can go up if the prime rate changes, you paid your credit card bill late, your intro APR offer ended or your credit score dropped. If your APR increases, you can work on paying down your balance or transfer your balance to a card with a low or 0 percent intro APR offer.

The Federal Reserve doesn't directly set auto loan rates — but it does affect the cost for lenders to borrow money. When the Fed increases rates, as they have 11 times since March 2022, it usually means lenders are quick to follow. High interest rates have offset any concrete wins from stabilizing vehicle prices.

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

Is a 72-month car loan worth it? Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn't an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go.

One way to lower the interest rate on a car loan is to compare rates and payments terms from different sources to know all your options. Be sure to ask your current lender for a lower APR on your car loan. If you are denied a loan, inform them of your other offers and see if they will match or beat the lowest offer.

NerdWallet recommends financing new cars for no more than 60 months and used cars for no more than 36 months. These maximums can help you avoid some of the negative outcomes of long-term loans.

In today's automotive market, with prices and rates on the rise, a 2.9% APR is a good deal.

Dealers get you in the door by advertising incredibly low interest rates for vehicle financing, say a 0.9 annual percentage rate (APR). That's a really good rate for a loan, but they aren't giving that rate to everyone.

For a buyer with subprime credit, a rate of 5.9% could be a good deal. That's because our records show subprime car loans often come in around 13%. If you have a credit score under 670, odds are you'll need to work with a dealer that specializes in bad credit or take advantage of financing programs for subprime credit.