Real Finance Rates with 750 Credit Score
Interest rates on auto loans have gotten bad. How bad? If you have excellent credit, you can expect to pay over 6% interest on a 60 month loan. Those with bad credit are paying upwards of 20%!
According to Edmunds, the average interest rate on new vehicles rose to 6.5% in the last 3 months of 2022, compared to 4.1% a year ago. That's more than a 2% increase in just one year, adding about $2,000 in additional cost to the average new car loan.
It looks like rates have risen even more just in the past few weeks. According to Jonathan Dorf, a General Sales Manager at a Honda dealership in Pennsylvania, even those with good credit scores of 750 and higher are getting quotes as high as 7.49%.
Jonathon shared the following image on a recent twitter post showing the rates he got on a 60 month loan from 3 local credit unions and 2 large lenders.
The interest rates for a $33,000 loan on a 2023 Honda ranged from 5.49% to 7.49%. The average rate was 6.3%, and these do not include any dealer markup, which can add up to 2.5% on top of these rates.
It goes to show how important it is to shop around for the best finance rates. Just with this example, the difference between the lowest and highest quoted rate is $31 per month, which doesn't seem like a lot, but over a 60 month loan - that's nearly $1,800 in extra interest cost.
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid