Used car loan rates in 2021 depend on your credit score which is determined by observing your lending history,the bank statement and your asset details. It is checked by the lenders before financing your car. They just need to be sure that you would be able to pay back the loan. The used car low interest rates depend on the high credit score. If you are able to get a high credit score like 650+, you would get the lowest car loan rates in 2021. On average, used car loan interest rates in 2021 range from 5% to 18% depending on your credit score. If your credit score is higher, your auto loan rate would be minimal. You must have to acquire a proper car loan guidance to concede the minimal loan interest, if you are planning to buy a used financed car in 2021.
What Are Used Car Interest Rates?
Interest rates on the used car are the extra bucks along with the actual price which are demanded, by the financers, against a flexible loan deal. It is the same concept as the interest on any kind of loan. If you want the financers to finance your used car for more years, the interest rate would be higher. The interest rates on used cars are relatively higher than the interest rates on the new cars.
Best Auto Loan Rates 72 Months
The best auto loan rates for 72 months time period should be between 4-6% for the buyers with good credit scores. Normally, 90% of the deals had been going with a 60 months period till 2020. Now, after a pandemic, the whole world is facing economic destability. That’s why the time period of 72 months is becoming a necessity for most of the people. Dealers won’t have a problem too, as the 72 months loan period provides them some extra interest rate; however, there is a minimal chance that any of the persons having low credit scores may get 72 months time span to pay the debt.
Average Car Loan Interest Rate by Credit Score
The credit score is one of the major factors while setting a particular interest rate between the buyers and the finance dealers. The more credit score will lead to a lesser car loan interest. On average the loan interest ranges between the 3% to 15% depending on the different sections of the credit scores. These sections are made according to some certain credit scores. Following are some of the average car loan interest rates by the credit score:
- 750+ credit scores may lead to the affordable 3-5% lowest auto loan rates.
- 700-750 credit scores may lead to a good loan rate of just 5-6%.
- 600-700 credit scores may lead towards a 10-11% loan rate on average.
- 450-600 credit scores are considered as bad ones and the buyers with such low credit scores are considered as the risky ones. So they have to bear 15-18% loan interest rate on average.
Difference between New and Used Car Interest Rates
There is definitely a difference between a new car interest rate and a used car interest rate. Used car interest rate is normally the higher one because used cars are bought by the middle class people who have low credit scores and they are doubted that they may cause trouble in future so it is evident that dealers try to fetch as much money as they can from these low credit scorers. The detailed comparison between the interest rates over new cars vs used cars may give you exact details regarding the difference interest rates for different types of car.
- If a specific person is having a high credit score of 700+ then he is considered as an elite buyer and he can have the lowest auto loan rates. Therefore, there is not much difference between its loan interest for a new car or a used car. He simply has to bear 3% loan interest for the new car and he can have a used car low interest rate of 4%.
- If a person’s credit score lies between 600-750, he has to see a significant gap of 2% between a 4% interest rate for a new car and 6% loan interest rate for a used car.
- If a person has a low credit score of 500-650, he has to face a massive loan interest difference between an interest on a new car (10%) and an interest rate on a used car (15%)
- A worst credit score under 500 will lead to a highest interest rate of 13% for a new car and the 20% interest rate on a used car. That’s the biggest interest rate difference 0f 7% as well.
On average, there is a gap of 0.5-5% between the interest rates of used cars and the new cars. More or less every dealer in Washington has the same interest rate gap. You can look for any of the well reputed dealers related to car finance in Washington DC for your loan related queries.