What APR Should I Expect With My Credit Score?
Your credit score is the single biggest factor in determining the interest rate on your car loan. A higher score means a lower rate, and even a small difference in APR can cost you thousands over the life of a loan.
Here is what you should expect based on published industry data.
Average Auto Loan APR by Credit Tier
These benchmarks come from Experian's State of Automotive Finance Market report, one of the most widely cited sources in the industry.
New Cars
| Credit Tier | Score Range | Average APR |
|---|---|---|
| Super Prime | 781–850 | 5.61% |
| Prime | 661–780 | 6.88% |
| Nonprime | 601–660 | 9.29% |
| Subprime | 501–600 | 11.86% |
| Deep Subprime | 300–500 | 14.17% |
Used Cars
| Credit Tier | Score Range | Average APR |
|---|---|---|
| Super Prime | 781–850 | 7.43% |
| Prime | 661–780 | 9.33% |
| Nonprime | 601–660 | 13.53% |
| Subprime | 501–600 | 18.39% |
| Deep Subprime | 300–500 | 21.18% |
What This Means for You
If your dealer is offering you a rate significantly above the average for your tier, there is a good chance you are paying a markup. Dealers are legally allowed to add 1–2% on top of the rate the lender approves you for. This is called dealer reserve, and it is how dealers profit from your financing.
For example, if you have a 720 credit score (prime tier) and your dealer offers 8.5% on a new car, that is 1.62% above the national average of 6.88%. On a $30,000 loan over 60 months, that 1.62% costs you roughly $1,300 extra.
How to Check Your Rate
You can check whether your dealer's APR is fair for your credit score in 30 seconds using Baywall's free rate check. Enter your credit score, loan details, and the rate your dealer quoted. You will get an instant assessment of whether your rate is great, fair, or high.
Can You Negotiate a Lower APR?
Yes. Most buyers do not realize that the dealer's first offer is not the final rate. Here is what you can do:
- Know your benchmark — Use the table above or Baywall to understand what rate you should be getting
- Get pre-approved — A pre-approval from a bank or credit union gives you leverage
- Ask the dealer to beat it — Many dealers will match or beat a pre-approval to keep your financing in-house
- Check credit union rates — Credit unions consistently offer lower rates than dealer financing
The Bottom Line
Your credit score determines your rate tier. The table above tells you the national average. If your dealer is quoting above that number, you have room to negotiate. The first step is knowing where you stand.