For those with poor credit, rates can range all the way up to 25% or more.

For very well-qualified borrowers, rates can be as low as around 2%. The range of APRs for car loans varies significantly. Lenders are required to clearly list the APR and explain the borrowing costs. In general, APR for new vehicles tends to be lower than it is for used vehicles.ĪPR will be clearly listed on your loan agreement. The better your credit score, the lower the APR will typically be.Īnother factor is whether you’re buying a new car or a used car. How is APR calculated for my car loan?ĪPR for a car loan is calculated based on the borrower's credit score and creditworthiness.

So a car loan might have an interest rate of 7% and an APR of 7.25%. APR is a very accurate measure of how much it costs in total to borrow money because it accounts for both the interest you pay as well as certain fees.ĪPR will generally be slightly higher than the interest rate because APR includes fees. In this case, a $20,000 loan would cost $2,000 in interest and fees per year.ĪPR is similar to interest rate, but the difference is that APR also includes certain fees. It includes the interest rate and certain fees.įor example, an APR of 10% means that borrowing money will cost 10% per year. It’s a measure of the cost of borrowing money, expressed as a percentage. Borrowing funds to pay for a vehicle is always going to cost money in interest and fees, which is measured in “APR.”īut what is APR, exactly, and what is a good APR for a car loan? What is APR?ĪPR stands for annual percentage rate. The vast majority of us cannot afford to pay cash for vehicles, so we rely on auto loans. And even for used cars, the average sits close to $30,000. The average price for a new car in America is a whopping $48,000, according to recent data.

Estimate auto loan apr