If you're buying a car at a rate of 5.9% APR, you could be getting a bad deal. In truth, whether or not that's a good or bad rate will depend on a variety of factors such as your credit history, the loan term, and whether you're buying a new or used car. Here, we'll focus on manufacturer incentives for buying a new car or truck.
On a 36-month loan, 5.9% APR with above-average credit is a bad rate. If you see a rate this high with captive financing, it could be because it's for a longer-term loan. For example, Ford Credit's best 75-month rate on the popular Bronco Sport is 5.9% APR. On the Mustang, there's even an 84-month APR deal at 5.9%.
Longer loans typically have higher rates than shorter ones. In some cases, manufacturers may limit their best deals to shorter-term options like 36 or 48-month financing. These rate deals can be tempting by offering the prospect of zero-interest financing, but may not be appropriate if you're looking to lower your payment.
Although 84-month loans aren't a good idea for everyone, longer loans can save consumers money when low rates are involved. Sadly, a 5.9% interest rate for 7 years on a $40,000 car would translate to over $8,900 in interest. As a result, that $40,000 car would cost nearly $49,000 before factoring in any taxes & fees.
For a buyer with subprime credit, a rate of 5.9% could be a good deal. That's because our records show subprime car loans often come in around 13%. If you have a credit score under 670, odds are you'll need to work with a dealer that specializes in bad credit or take advantage of financing programs for subprime credit.
Alex has been writing about car buying and leasing for over a decade. Originally from San Francisco, Alex has a degree in History from the University of California, Santa Barbara, and has been a lifelong lover of cars. Alex’s work has been featured in publications such as Forbes, The Wall Street Journal, Motor Trend, and more.
For a buyer with subprime credit, a rate of 5.9% could be a good deal. That's because our records show subprime car loans often come in around 13%. If you have a credit score under 670, odds are you'll need to work with a dealer that specializes in bad credit or take advantage of financing programs for subprime credit.
Even people with good credit scores make mistakes, and a bank may charge a penalty APR on your credit card without placing a negative mark on your credit report. Penalty APRs typically increase credit card interest rates significantly due to a late, returned or missed payment.
The amount of interest you may pay can vary a lot since the APR is determined based on a variety of factors. Among others, these factors typically include credit history, amount financed, length of the term, age of collateral, vehicle, and the down payment. The better your credit, the lower the interest rate.
Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn't an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go. You can learn more about car loans here.
On a 36-month loan, 5.9% APR with above-average credit is a bad rate. If you see a rate this high with captive financing, it could be because it's for a longer-term loan.
Generally, a good APR for a car loan might look something like this: Excellent Credit (750+): 3% or lower for new cars, 4% or lower for used cars. Good Credit (700-749): 4-5% for new cars, 5-6% for used cars. Fair Credit (650-699): 6-7% for new cars, 7-8% for used cars.
The First Call Resolution industry standard for a good FCR rate is 70% to 79%. Therefore, call centers with an FCR rate below 70% need improvement. Conversely, the World-class FCR rate is 80% or higher, and only 5% of call centers can achieve the World-Class FCR Rate from a CX journey perspective.
Generally, a good APR for a car loan might look something like this: Excellent Credit (750+): 3% or lower for new cars, 4% or lower for used cars. Good Credit (700-749): 4-5% for new cars, 5-6% for used cars. Fair Credit (650-699): 6-7% for new cars, 7-8% for used cars.
A 10% APR is good for credit cards and personal loans, as it's cheaper than average. On the other hand, a 10% APR is not good for mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay.
For someone with a good or very good credit score, an APR of 20% could be good, while a 12% APR may be good for someone with an excellent score. If your score is lower, an APR of 25% could be considered good. No matter your score, the lower the APR, the better.
The APR you receive is based on your credit score – the higher your score, the lower your APR. A good APR is around 22%, which is the current average for credit cards. People with bad credit may only have options for higher APR credit cards around 30%. Some people with good credit may find cards with APR as low as 16%.
Introduction: My name is Kerri Lueilwitz, I am a courageous, gentle, quaint, thankful, outstanding, brave, vast person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
