whats a good interest rate for auto loans these days?

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shortylickens

shortylickens

No Lifer
Jul 15, 2003
80,287
17,081
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for the first time in my life I am considering financing as opposed to purchasing outright.
Navy Federal claimed to offer loans as low as 2.99 percent but when I actually attempted to apply they stated 3.79 percent.
Due to my lack of experience I have no idea if thats good or bad and strangely there doesn't seem to be an abundance of information on what kind of interest is actually considered good or bad in July of 2019.
 
daveybrat

daveybrat

Elite Member
Super Moderator
Jan 31, 2000
5,805
1,018
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Yes, even 3.79 percent is good. It still all depends on your credit score and other factors.
 
BurnItDwn

BurnItDwn

Lifer
Oct 10, 1999
26,335
1,845
126
I got like 3.8% on a used car a couple of months ago, thought that was quite good, as it's not too much off from my home mortgage rate.
 
zinfamous

zinfamous

No Lifer
Jul 12, 2006
111,720
31,081
146
3.5-3.9% seems like the typical good window for most car loans these days.

...that might change by the end of the year, and it also depends on what type of car you are looking at: used or new?

I think the only way to get better than that is something like those monthly offers direct from the manufacturers, some as low as 1.9% for a 50 month loan. Issue with that, though, is most dealers don't offer their low advertised prices, including their own limited incentives, unless you finance directly through them (generally a bad idea, but not always)--and this pretty much only applies to new cars, anyway, so may not be relevant to you if you are buying used.

At the same time, it's often better to go with the cash rebate(s) incentives off the total price than a lower rate on a loan when facing those two decisions.
 
KentState

KentState

Diamond Member
Oct 19, 2001
8,397
393
126
Depends on what vehicle you are looking at. A lot of 0% APR for 60-72 months out there from the manufacturers. For 60 months, I would say < 2% APR is normal if you look around.

What vehicle are you looking at?
 
Wuzup101

Wuzup101

Platinum Member
Feb 20, 2002
2,334
37
91
New cars you can still get loans better than 3.79 for 60 months. For something used, it really depends on how old the vehicle is, but that seems good/reasonable. For reference, my credit union is currently at 2.49 for 2018 and newer and 2.99 for 2014-2017 used. That's for 60 months (it goes up slightly if you want a longer term).
 
JeepinEd

JeepinEd

Senior member
Dec 12, 2005
869
63
91
I just bought a new Mazda 6 and got 0% apr. I'd say that's a pretty good interest rate.
 
zinfamous

zinfamous

No Lifer
Jul 12, 2006
111,720
31,081
146
cardiac said:
The Feds just cut the rate a few hours ago, so wait a day and see if all rates come down a bit. I'm like JLEE, I use www.penfed.org
Click to expand...

heh, I've been waiting for this myself. I'm *thinking* there might be another rate cut before the end of the year, so I might wait a little longer, but I'll probably still shop around. I've already dumped some heavy piles of cash into my principal over the last couple of months, after selling the Mazda and, just because, so I didn't really care about accepting a shitty APR (3.99) from the dealer. I just hoped to use that as leverage to get a lower OTD price. I have no early payoff penalty and am looking at no refinance fees on some offers, so I expect that I will do that by the end of the year.

I'm already looking at 1.5-2 years ahead of payoff schedule on this loan. (it's also a shitty 72 month loan which I agreed to, again, because I knew I would never be paying that interest)
 
BonzaiDuck

BonzaiDuck

Lifer
Jun 30, 2004
16,382
1,911
126
As someone else said -- it is not uncommon to get a 0% loan in a manufacturer's package for 60 to 72 months. I knew someone who scored that luck when he purchased a 2013 Toyota Corolla new.

I'd think this possibility is much less likely for a pre-owned vehicle. The rule of thumb I would follow or intend to follow in my next vehicle purchase avoids any loan for a used car -- paying cash on the barrel-head. For a new car, given the general magnitude of the price, I might pay half down and the remainder with hopefully a 0% loan for five or six years.

If a person didn't have the freedom to pay cash, then they're going to finance. Loans at 2.5% (+/-) aren't a terrible burden for the interest. If you buy a new vehicle with greater chance of a 0% loan, it will depreciate as much as 2/3 over six years, and the loss can be explained as dated technology and new-car style features in addition to just the wear and consumption of parts. You might pay interest for a used-car loan, but you're not paying extra for the quickly-diminishing style and feature advantages. You could run the numbers for comparison based on calculated cumulative interest and blue-book trends.

So if possible, the best position requires having a growing savings account and borrowing from yourself.
 
Jimzz

Jimzz

Diamond Member
Oct 23, 2012
4,399
190
106
If looking at new cars then there should be very low rates and/or good deals. Car sales are down, inventory is up, and many large manufactures are already bracing for a recession.

So good time to start looking and buy a little later this year. And Penfed is a good place to look to get a rough idea what rates are for used cars. Also good place to get your loan.
 
BonzaiDuck

BonzaiDuck

Lifer
Jun 30, 2004
16,382
1,911
126
It was always my understanding there is an inverse relationship between interest-rate offers or opportunities, and the borrower's credit score. How this actually works, I cannot say at the moment, but I think I've had firsthand experience with it.
 
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