How Much Car Finance Interest Will You Be Charged?

Individuals with good credit standing and above average credit scores get better car finance interest rates. Unfortunately, the global economy today has taken an impact on a lot of people’s lives, and getting a score of at least 660 has become harder for most people.

The following are the US national average auto finance interest rates based on a 60 month car loan (according to FICO score):

FICO Score	Interest Rate
720 - 850	5.78%
690 - 719	7.42%
660 - 689	9.45%
620 - 659	12.79%
590 - 619	17.70%
500 - 589	18.52%

Individuals who are planning on getting a car loan should consider the interest rates given to them by car loan companies. The duration of the loan does not directly affect the interest amount that a car buyer is charged. The interest rate for car buyers depends largely on what their credit score is. The higher the credit score, the lower the interest rate. Unfortunately, a lot of people fall under the 620 to 659 category. An interest rate of 12.79 percent is too much for a lot of people.

Buyers who have lower FICO scores but have the capacity to get short term loans are better off than getting a 60 month loan. Credit scores can greatly improve over time, and being stuck with an 18.52 percent interest rate when you’ve already improved your FICO just isn’t fair.

If your current credit score falls below 590, consider holding off purchasing a car until you get a score of at least 620. The 4.91 percent interest rate difference between a score of 590 and 620 is already a valuable amount you can save for something else.

Also, get a quotation from more than one car finance company and compare the rates they give. It is better to have many options than to settle with what you think is already a great deal. Some companies give great deals such as additional savings, discounts, and rebates.