Interest rate for car loan with 800 credit score

There’s no doubt that buying a car is expensive. The average price of a new car is more than $36,000, and a used car costs more than $20,000 on average. However, for many buyers, a car’s price doesn’t tell the entire story about what it costs to buy it. Because most people take out a loan to buy a car, the interest rate on their auto loan drives the final cost of the car up. In fact, an auto loan’s interest rate is usually the second most expensive part of buying a car. If you can get a good auto loan interest rate, you can save thousands.  

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View rates for new cars, used cars, or refinancing. Get four offers so you're prepared before you visit the dealer.

Credit ScoreNew Car LoanUsed Car LoanRefinance Car Loan750 or higher8.60%8.85%5.55%700-7499.67%9.92%6.27%600-69914.80%15.05%8.65%451-59920.58%20.83%11.21%450 or lower22.16%22.41%N/A

These rates were supplied by our partner, MyAutoloan. These rates are for illustrative purposes only. Your individual car loan rate will vary.

Credit ScoreNew Car LoanUsed Car LoanRefinance Car Loan750 or higher8.60%8.85%5.55%

A score of 750 points or higher is considered excellent credit. These borrowers are seen as having a very low risk by lenders, so they get charged less interest. If your credit score is in this range, you may qualify for financing incentives and loan deals offered by auto makers. These car deals can have financing as low as 0%, potentially saving you thousands.

Credit ScoreNew Car LoanUsed Car LoanRefinance Car Loan700-7499.67%9.92%6.27%

Lenders consider people with a score in the range of 700 to 749 to be a fairly low risk. However, while people in this range would generally get charged below-average interest rates from banks, credit unions, and other lenders, they are unlikely to qualify for zero-percent financing offers from car companies.

Credit ScoreNew Car LoanUsed Car LoanRefinance Car Loan600-69914.80%15.05%8.65%

When your credit score is in the 600s, it starts to get expensive to borrow money. On the bright side, the rates for car loan refinancing are still relatively low for these borrowers. That means if you purchase a car with a high interest rate, you can refinance and save money once you’ve built up some equity.

Credit ScoreNew Car LoanUsed Car LoanRefinance Car Loan451-59920.58%20.83%11.21%

People with poor credit are known as subprime borrowers. Lenders see people with subprime credit as being at a higher risk for not paying a loan back. As a result, lenders charge these borrowers higher interest rates to protect against loss. Some lenders won’t even work with borrowers in this credit range. Learn more about how to buy a car with bad credit.

Credit ScoreNew Car LoanUsed Car LoanRefinance Car Loan450 or lower22.16%22.41%N/A

Deep subprime borrowers will likely have a hard time finding a lender for a car loan, and when they do, they will pay extremely high interest rates. These high interest rates can add thousands of dollars to the overall price of a car and make monthly car payments extremely high.

Compare Auto Loan Rates

View rates for new cars, used cars, or refinancing. Get four offers so you're prepared before you visit the dealer.

Let’s look at the different auto loan rates above and see how they impact your bottom line. We’ll use a loan term of five years and a new-car loan amount of $28,800 (which is the amount left to finance after a 20% down payment with a new car priced at $36,000).

Using the average interest rate for people with top-notch credit, 8.60%, that works out to $6,736 in interest payments. People with good credit have an average interest rate of 9.67% this month, resulting in $7,635 in interest with this loan. Borrowers with fair credit have an average interest rate of 14.80% this month, and this loan would cost $12,128 in interest. At 20.58%, the average new-car interest rate we found for people with poor credit, the total interest comes to $17,541. That’s about $10,800 in added costs compared to what someone with excellent credit would pay.

Let’s take a look at a 60-month loan on a used car. We’ll use a loan amount of $16,000. Borrowers with top-tier credit and this month’s average rate of 8.85% will pay interest of $3,858. People with good credit have an average rate of 9.92% this month, which results in total interest of $4,359. Borrowers with fair credit and an average interest rate of 15.05% would pay $6,864 in interest over the life of a five-year loan. Buyers with poor credit get an average interest rate of 20.83%, and pay $9,880 in interest, which is about $6,000 more than someone with excellent credit would pay in interest.

Car loan rates are driven by two main factors: borrowing interest rates set by the Federal Reserve and your credit score. When the federal reserve keeps interest rates low, borrowing money to buy a car tends to be less expensive. Today, the Federal Reserve is pushing interest rates higher to help curb inflation, which is making borrowing money for a car more expensive.

After rates set by the Federal Reserve, your credit score has the most impact on the car loan interest rate you’ll pay. If you have a good credit score, you’ll qualify for a lower interest rate. When you finance a car, you borrow the amount of money you need to buy the car, and the lender charges you interest. The interest is basically rent on the money you borrow. It allows the lender to cover their expenses, make a profit and get more of their money back if you default on a loan. You can read more about how financing a car works and check out our guide to car loans and leasing for more details.

Lenders can show that, on average, people with low credit scores are less likely to pay back the money they borrow. Factors that can contribute to a low credit score include things like being late on loan payments and other bills, having a high level of debt, or failing to repay loans. All of these factors indicate that a borrower has trouble managing money.

Other factors that impact your auto loan rate are the type and length of the loan. Used-car loans have a higher interest rate than new-car loans because used cars have a lower resale value than new cars and the values of used cars are less predictable. If you default on a used car loan, the lending company will be left with a lower-value asset to sell. They charge more interest to protect themselves and recoup more of their money in case the loan goes into default.

The length of the loan you’re looking for also affects your interest rate. A longer loan term means lower monthly payments, but it also means that you’ll be taking longer to pay the lender back and there's a higher risk that you won't follow through on all of your payments. A higher interest rate helps them get more of their money back upfront, in the event you default on the loan.

The best way to lower your car loan interest rate is to improve your credit score. It may take a while, but if you pay bills on time and lower your debt-to-income ratio, your credit score will improve. As you get a better credit score, you will qualify for better auto loan rates, and you’ll save money on your car purchase. Read more about how to buy a car with bad credit for other ways to improve your credit score.

Once you have an improved credit score, shop around for car loan rate quotes. By getting quotes from multiple lenders, you’ll be able to choose the one that saves you the most money. You’ll also have an idea of what you should be paying in interest before you head to the dealership. Car dealers usually offer financing, but unless you know the rates you qualify for, you won’t know if the dealer is offering you a good or a bad financing deal. Having financing offers in hand gives the dealer an interest rate to beat if they want your financing business.

Compare Auto Loan Rates

View rates for new cars, used cars, or refinancing. Get four offers so you're prepared before you visit the dealer.

You can also save on your auto loan by choosing a shorter loan length or putting more money down on your car, which lessens the amount of money you have to borrow.

If you can’t raise your credit score enough to get a better car loan rate by the time you need to buy a car, you can get a loan with a higher rate, make the payments and work to refinance your car loan to a lower rate later. While you’ll still spend more on interest than if you had gotten the lower rate to start with, you’ll still probably pay less overall than if you kept the higher-interest loan for the full term.

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