Auto Loan FAQ
What is a good interest rate for a car loan in 2026?
Average new car rates are around 7–8% and used car rates are 10–12%. Buyers with 750+ credit scores often get 5–6% on new cars. Credit unions typically beat dealership financing by 1–2%. Always get pre-approved before visiting a dealer.
Is a 72 or 84-month car loan a bad idea?
Longer terms lower your monthly payment but dramatically increase total interest. A $35,000 car at 8% costs $9,000+ in interest over 84 months vs. $5,600 over 60 months. You're also "upside down" (owing more than the car is worth) for years, which is risky if you need to sell.
New car vs. used — which is cheaper?
Used cars almost always win on total cost. New cars lose 15–25% of value in year one. A 2–3 year old certified pre-owned vehicle gives most of the reliability of new at significantly lower cost. The tradeoff: used car loan rates are higher, so factor that in using the rate slider above.
How much should I put down on a car?
Most experts recommend 10–20% down on a new car and at least 10% on used. This reduces your loan, lowers monthly payments, and protects you from being immediately underwater due to depreciation. Zero-down loans are risky for this reason.