What is a good APR for a car loan right now?

Where “good” starts

Forget hunting for a single magic number. “Good” is relative to the market and to your own credit file. In Q1 2026, the average new-car loan carried a 6.39% APR, and buyers with excellent credit averaged closer to 4.55%. On the used side the whole scale shifts up: the average used loan ran 11.43%, with excellent-credit buyers near 6.30%. If your quote sits at or below the average for your vehicle type, you are in reasonable shape. If it is closer to the excellent-credit number, you are doing well.

New and used are not the same conversation

Treat these as two separate markets, because lenders do. A used-car APR of 9% might be a genuinely good rate for that borrower’s file, while the same 9% on a new-car loan would sit well above average. Part of the reason used rates run higher across the board is the collateral itself: a used vehicle has already absorbed its steepest depreciation, its remaining service life is less predictable, and mileage and condition vary enough that two similar-looking cars can be worth different amounts. Lenders price that uncertainty in. New cars have a known window sticker and a more predictable early depreciation curve, so the lender’s risk is lower and the rate reflects it. Always compare your quote against the right side of the market, new against new, used against used, not against a number you saw quoted for the other one.

What the spread actually costs on a new-car loan

The gap between “good” and “not good” is not a rounding error. Here is the same loan, financed at three of the Q1 2026 average new-car rates, illustrated on a $35,000 balance over an assumed 60 month term:

Figures verified 2026-07-24. Payments and interest are illustrative math from the stated APR facts on an assumed $35,000 balance and 60 month term, not a quote.

Notice how small the monthly payment gap looks, about $200, next to the interest gap, nearly $12,000. A rate quoted to you as “just a couple points higher” is rarely just a couple points of anything once it runs for five or six years.

The used-car version of the same math

Swap in the used-car tier rates on that same $35,000 illustration and the story gets rougher:

Figures verified 2026-07-24. Payments and interest are illustrative math from the stated APR facts on an assumed $35,000 balance and 60 month term, not a quote.

That is a wider spread than new-car buyers see, in both APR points and dollars. An excellent-credit used buyer already pays more than an excellent-credit new buyer, 6.30% against 4.55%, and a poor-credit used buyer can end up paying more in interest than the car is worth. A used-car budget needs its own math, not new-car assumptions with a smaller price tag.

What actually determines which tier you land in

Credit score is the headline factor, but it is not the only one. Lenders also weigh your debt-to-income ratio, how much you are putting down relative to the vehicle’s price, the length of the loan you are requesting, and how stable your income looks on paper. Two people with similar credit scores can get different offers because one is putting more down or borrowing for a shorter term, both of which lower the lender’s risk. None of this is published as a simple formula, which is another reason to treat these averages as a benchmark rather than a promise.

These averages move, recheck before you shop

Every figure above is a Q1 2026 snapshot. Auto loan APRs track broader interest rate policy and lender competition, so they shift from quarter to quarter, sometimes meaningfully. A rate that looked competitive two quarters ago is not guaranteed to be competitive now. Before you shop, it costs nothing to check whether the current averages have moved, and to ask your lender or the dealer’s finance office what quarter their posted rate reflects.

The failure mode a benchmark protects against

Without knowing where the averages sit, you have no way to tell if a quoted rate is fair or padded. Dealers can add a markup on top of what the lender actually approved, a practice called dealer reserve, and it is legal within limits, disclosed in the paperwork but easy to miss if you are only watching the payment. The only real defense is a number to compare against, either the market averages above or, better, your own preapproval from a bank or credit union. Walking in blind is how a fair-looking payment quietly carries an unfair rate, and by the time you notice, you have already signed.

How to know if your number is actually good

Ask what tier the lender placed you in and what rate should go with it, then compare that against the averages above for your vehicle type. A quote noticeably above the average for your side of the market, with no explanation tied to your file, is worth pushing back on or shopping elsewhere. A short checklist before you sign:

• Confirm whether the quote is priced as new or used financing, they are not interchangeable benchmarks.
• Ask the finance office what credit tier they used to price your loan.
• Get at least one outside quote, a bank or credit union preapproval, to compare against.
• Check whether a manufacturer promotional rate applies to your specific vehicle instead.

Financing through the dealer isn’t automatically the worse option, but you need a comparison point to know either way. It is also worth asking whether a promotional 0% offer applies to your specific vehicle, since that beats any tier average outright if you actually qualify.

Next steps

Get preapproved before you shop so you walk in with a real number, not a guess. Compare any dealer offer against both your preapproval and the averages above for new or used. If the math does not add up, ask why, in those exact words.