Among all financing sources, the average APR on a new car loan for someone with good credit is right around 3% for new cars and just over 3% for used cars.
The picture is brightest for people with credit scores above 720.
What does 0% APR on a car mean?
For 0 percent loans, you pay no interest. That means you’re borrowing money from a bank but paying no fee for the privilege of doing so. Essentially, 0 percent interest gives you the chance to pay the same amount of money as a cash buyer, even though you’re spreading your payments over a longer term.
What’s considered a high interest rate for a car?
However, an individual lender, such as Wells Fargo, offers rates at anywhere from 3.99 percent to 24.24 percent. High interest rates are generally anything above the national average, but this figure can vary widely.
HOW IS CAR interest calculated?
Divide your interest rate by the number of payments you’ll make in the year (interest rates are expressed annually). So, for example, if you’re making monthly payments, divide by 12. 2. Multiply it by the balance of your loan, which for the first payment, will be your whole principal amount.
Photo in the article by “Moving at the Speed of Creativity”