Review of the best auto loan rates for borrowers with credit scores between 650 and 659 for new, used, and refinanced vehicles
A credit score between 650 and 659 is categorized by auto lenders as “non-prime” or “near prime.” Although your score is lower than the national average of 710, it is not “subprime,” which means that finding a lender will be more difficult. You will be qualified for nearly every new, used, or refinance auto loan available, but you won’t get the lowest interest rates.
Your credit isn’t the only factor affecting your interest rate. You must choose between financing through an online lender, your local bank or credit union, or the car dealer. Additionally, your loan’s term and down payment matter. Let’s examine auto loan rates in more detail for applicants with credit scores between 650 and 659.
Disclaimer: In this article, “Credit Score” refers to the FICO score. If you have a different score (i. e. VantageScore), that does not likely equal your FICO score. The FICO Auto Score is a unique variation of the FICO score that is used for auto lending. This score will probably be used to determine the terms and rates you will pay. You can get your FICO Auto Score here. In this post:
Current Auto Loan Interest Rates (December 2022)
Average rates for Q3 2022
| Category | Score Range | New car average interest rate | Used car average interest rate |
|---|---|---|---|
| Deep subprime | 300-500 | 12.93% | 19.81% |
| Subprime | 501-600 | 10.11% | 15.86% |
| Near prime | 601-660 | 7.25% | 9.81% |
| Prime | 661-780 | 4.90% | 5.47% |
| Super prime | 781-850 | 3.84% | 3.69% |
Actual interest rates are based on many factors such as state, down payment, income, and others. Source: Experian: State of the Automotive Finance Market Q3 2022
Auto Loan Rates by Type of Financing
Lowest found rates | Accessed on 12/07/2022
| 36 months or less | 37-60 months | 61-72 months | 73-84 months | |
|---|---|---|---|---|
| New Auto | 3.99% | 3.69% | 3.89% | 4.19% |
| Used Auto | 4.24% | 3.94% | 4.14% | 4.44% |
| Auto Refinance | 2.49% | 2.49% | 2.69% | 3.25% |
| Private Party | 3.99% | 3.99% | 3.99% | 4.19% |
| Lease Buyout | 2.49% | 2.39% | 2.99% | 3.59% |
* Source: MyAutoLoan.com Interest rates (APR) shown are the lowest rates participating lenders have recently offered. Your actual interest rate (APR) may be higher based on your unique, individual credit situation.
Auto Loan Rates for a New Car With 650 to 659 Credit Score
With a credit score between 650 and 659, the typical interest rate for a new car loan is 6. 75%.
The majority of dealerships will promote numerous incentives, such as cash rebates, low interest rates, or exclusive lease offers, for purchasing a new vehicle. Generally speaking, financing a new car will be much more affordable than financing a used car.
You might not be qualified for many of those offers if your credit score is in the range of 650 to 659. They might only be available to “prime” or “super-prime” customers.
☝️ Remember that the rates cited are averages. You may get different offers from different lenders. Make sure to compare prices rather than choosing the option with the most effective advertising.
Average Auto Loan Terms for a New Car
Based on national averages, the following is what you can reasonably anticipate to receive.
| Category | Score Range | Average interest rate | Average loan amount | Average term (months) | Average monthly payment |
|---|---|---|---|---|---|
| Deep subprime | 300-500 | 12.93% | $35,301 | 72.79 | $690 |
| Subprime | 501-600 | 10.11% | $40,946 | 74.25 | $733 |
| Near prime | 601-660 | 7.25% | $44,530 | 74.73 | $739 |
| Prime | 661-780 | 4.90% | $43,183 | 71.25 | $706 |
| Super prime | 781-850 | 3.84% | $37,912 | 64.14 | $668 |
Finding the Best New Car Auto Loan Rates for Subprime Credit
With a subprime credit score of 650 to 659, you can still obtain an auto loan despite the potential limitations. There are numerous lenders who focus on providing new car loans to those with poor credit.
Utilizing an auto loan matching service is the quickest way to receive offers from several lenders. Typically, these services can get you several offers in a matter of minutes.
Our #1 Auto Loan Matching Service
Since 1999, we’ve been assisting people with any-credit auto financing at more than 1000 dealerships nationwide. Fill out a simple form and get offers in minutes.
Auto Loan Rates for a Used Car With 650 to 659 Credit Score
What is a good interest rate for a used car? is a question that many people have.
For new car loan rates, we frequently see incredible offers online and on television, but used car rates are rarely advertised. For a used car loan, borrowers will typically pay a higher interest rate.
You should be eligible for a subprime APR rate with a credit score of 650–659, which will be higher than someone with a 700–800 credit score.
With a credit score between 650 and 659, the typical interest rate for a used car loan is 10. 33% (44. 75% higher than the average rate for a new car).
Used cars have higher rates because they are less valuable. If the lender must seize your vehicle, it might be challenging for them to sell it for enough money to pay your balance. That means more risk to the lender. Lenders charge higher rates when their risk rises.
Simply because the sticker price is frequently much less than the cost of a used car, used cars can still represent good value even with higher interest rates.
⚠️ Be Careful! Buying a used car has its risks. That’s why you want to always check the vehicle’s history. You can run a vehicle history report on sites like Carfax using the Vehicle Identification Number (VIN). If the dealer or seller will not give you the VIN, consider this a major red flag and move on to another vehicle.
Safely Compare Rates From Multiple Lenders
Since 1999, we’ve been assisting people with no credit auto financing; just complete our short form to receive offers.
Average Auto Loan Terms for a Used Car
According to national averages, this is the rate you can anticipate receiving.
| Category | Score Range | Average interest rate | Average loan amount | Average term (months) | Average monthly payment |
|---|---|---|---|---|---|
| Deep subprime | 300-500 | 19.81% | $20,480 | 62.68 | $524 |
| Subprime | 501-600 | 15.86% | $24,216 | 66.51 | $543 |
| Near prime | 601-660 | 9.81% | $28,594 | 69.06 | $541 |
| Prime | 661-780 | 5.47% | $30,222 | 69.14 | $518 |
| Super prime | 781-850 | 3.69% | $28,702 | 65.47 | $499 |
You can see the impact of the higher rates. Of course, there is a difference: In the US, the average price of a new car is $39,960, while the average cost of a used car is $22,000. That’s a big difference!.
Auto Refinance Rates With 650 to 659 Credit Score
With a credit score between 650 and 659, you can qualify for a refinance!
You could save money by refinancing if your credit score was lower when you took out your auto loan or if you financed your vehicle through a dealer and didn’t get a good deal.
If your credit score is lower than it was when you received your initial loan, avoid applying for a refinance auto loan.
Your monthly payment could be reduced through refinancing, and you’d get to keep the additional interest you save.
You may be able to significantly lower your monthly payment by refinancing with a longer-term loan. You could end up owing more than your car is worth and paying higher interest rates.
Average Auto Refinance Rates
The figures above will apply because refinance rates are typically the same as rates for a loan taken at the time of sale.
Factors That Affect Your Car Loan Rate
Finding a good auto rate for new, used, and refinance loans depends on a number of factors. Here are five factors that can significantly affect the auto loan rate you receive.
Your Credit Score
Auto loans are secured loans where your vehicle is used as collateral. If you default, the lender can repossess the car. Due to the fact that your loan is less risky than the majority of unsecured loans, interest rates are lower.
Your credit score has a significant impact on the interest rate and loan cost that are offered to you. See how much of an impact your credit score has on the average interest rates for new and used cars in the table below.
Average auto loan rates by credit score (Q3 2022)
| Category | Score Range | New car average interest rate | Used car average interest rate |
|---|---|---|---|
| Deep subprime | 300-500 | 12.93% | 19.81% |
| Subprime | 501-600 | 10.11% | 15.86% |
| Near prime | 601-660 | 7.25% | 9.81% |
| Prime | 661-780 | 4.90% | 5.47% |
| Super prime | 781-850 | 3.84% | 3.69% |
Actual interest rates are based on many factors such as state, down payment, income, and others. Source: Experian: State of the Automotive Finance Market Q3 2022
How Your Credit Score Affects the Monthly Payment
Here is an illustration of how your credit score affects the amount of your monthly payment.
Example:
Consider that you’re getting a new car loan with the following conditions:
Car cost: $30,000 Down payment: $3,000 Loan term: 48 months
| Credit Score | Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| 300-500 | 12.93% | $723.4 | $7,723 |
| 501-600 | 10.11% | $686.22 | $5,939 |
| 601-660 | 7.25% | $649.68 | $4,185 |
| 661-780 | 4.90% | $620.57 | $2,787 |
| 781-850 | 3.84% | $607.70 | $2,170 |
As you can see, your credit score has a significant influence on the interest rate and loan cost that are offered to you. You are at the bottom of the range and should anticipate extremely high interest rates if your score is between 650 and 659.
Consider trying to raise your score by at least 60 points if it is between 650 and 659 before applying for a car loan. You could save more than $30 a month and more than $2,700 over the course of the loan if you gained 60 points.
For many, the affordability of their monthly payments is the determining factor. Monthly payments are more affected by the loan term than by slight variations in your credit score.
Examining the impact of loan terms on monthly payments for various credit scores within our target range Let’s compare the impact of the loan term to the impact of a small change in your credit score on your auto loan using the same example from above.
Example:
Same as before, our car loan has the following terms:
Car cost: $30,000 Down payment: $3,000 Interest rate: 6. 07% Credit score: 650-659.
| Credit Score | 3 Year (36 months) | 5 Year (60 months) | 7 Year (84 months) | |||
|---|---|---|---|---|---|---|
| Monthly Payment | Total Interest | Monthly Payment | Total Interest | Monthly Payment | Total Interest | |
| 650 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 651 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 652 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 653 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 654 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 655 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 656 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 657 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 658 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
| 659 | $822.25 | $2,601 | $522.86 | $4,372 | $395.34 | $6,209 |
Long-term auto loans offer lower monthly payments, but they also have significant drawbacks. You may end up owing more than the value of your car for the majority of the loan term and you will pay significantly more interest overall. Before making a choice, research the problems with long-term auto loans!
To find out how much your credit score and loan term can influence your monthly payment and the total amount of interest you end up paying for your loan, use our auto loan calculator below.
To view and utilize the calculator, navigate to the full page.
Income & Debt-to-Income Ratio
Lenders will want to ensure that you have the resources necessary to make your monthly car loan payments. They consider how much money you make and spend each month to come to this conclusion.
Instead of calling the total of your expenses and debt “expenses,” they refer to it as your debt-to-income ratio.
Most lenders prefer that your debt to income ratio (DTI), which includes your new monthly auto payment, be lower than 40%. Lower is better, and a low DTI may enable you to obtain a better loan rate.
3 Steps To Calculate Debt-To-Income Ratio
As an illustration, if I had a DTI of 40% and had a monthly income of $5,000 and monthly expenses of $2,000, I would have a DTI of 40%.
To determine your DTI, use our debt-to-income ratio calculator.
Employment
Lenders want to lend money to people with steady incomes.
The length of time that borrowers have worked at a single job is the most typical indicator of a steady income.
People who frequently change jobs are not regarded as having a steady income.
Down Payment
You must put down money when buying a car or truck, whether it’s new or used. If you can make a sizable down payment, lenders might offer you a better interest rate.
It makes no difference if you have a credit score of 480 or 650.
Lenders prefer to see a 20% down payment when financing the purchase of a new car in order to ensure that you have some skin in the game. Without a down payment, some lenders will lend to you, but you might need a good credit rating. Additionally, you might discover that the loan’s conditions are unfavorable.
Because used cars don’t lose value as quickly as new cars do, lenders typically only require buyers to put down 10% when purchasing a used car.
You can use the value of your trade-in vehicle toward the down payment if you have one.
Typically, lenders won’t require a down payment for a refinance loan.
Who has the Best Auto Loan Rates? Credit Unions, Banks, or Online Lenders?
It can seem impossible to compare auto loan rates from different lenders.
It makes sense that you would want to use your neighborhood bank or credit union because you feel loyal to the company you entrust with your regular banking needs.
Going directly through your Credit Union or Bank may be your best option in some cases. Your bank or credit union is aware of your financial situation and may make an offer based on information other than your credit score.
However, the loan programs that nearby Credit Unions and Banks can provide might be constrained. They might be unable to compete with websites that offer the lowest auto loan rates.
You must also take into account the time it takes to visit your local financial institution and request an auto loan quote. Online lenders may give you a quote in seconds.
Use caution if you obtain an auto loan from a Credit Union or Bank with which you maintain a checking, savings, or certificate of deposit account. Some financial institutions demand that you sign a document authorizing them to take payment without your consent in the event that you fail to pay.
In contrast, Auto Credit Express® allows you to get four loan offers after completing a brief, one-page application in just two minutes.
Obtaining an online lender quote is free and takes almost no time, even if you decide to check out what your bank or credit union has to offer.
Because of the numerous decisions you must make while the ‘helpful’ high-pressure car salesman is clinging to your hip, buying a car can be a stressful experience.
By getting pre-approved for an auto loan before entering the lot of the car dealership, you can help reduce some of that pressure and stress.
Dealer Financing Can Be Costly
Many people are unaware that there are other financing options besides those offered by the dealership. Dealer financing is often the most expensive option.
In fact, according to U.S. News:
Apply with multiple lenders is the one thing you should always do to get the best rate. Borrowers who consistently shop around for deals receive better rates than those who accept the first offer made to them. It gives you confidence that you are getting the best deal possible when you are pre-approved by a number of lenders. Be sure to keep your applications within a 15-day window. Because you are shopping, the credit bureaus will only record one hard inquiry. Multiple hard inquiries can harm your credit!.
Auto Loan Rate Scams
Most of us believe that our credit score determines our loan rate and that lenders will provide the best rate they can for a particular score.
That may not always be the case. A 2021 study from Consumer Reports analyzed almost 858,000 car loans and determined that “consumers who are financially similar and have comparable credit scores can be charged wildly divergent interest rates”.
Consumer Reports found that regardless of your credit score, some dealers, in particular, may mark up interest rates to whatever they believe they can get.
The best way to prevent this kind of abuse is to compare several loan offers. Before speaking with a dealer, always get prequalified for a car loan; if the dealer can beat your current offer, great! With an offer in hand, it will be much more difficult for a dealer to overcharge you.
Ways to Reduce Your Auto Loan Interest Rate
If you can raise your credit score to 700+, you will be eligible for loans with lower interest rates than those available to borrowers with credit scores between 650 and 659.
It might be a good idea to spend some time trying to raise your credit score and learning how to build credit.
Spending the time and money would lower your risk level, give you more financial freedom, and provide you with better opportunities.
Asking a family member to co-sign on the loan is another way to obtain a car loan with a lower interest rate.
You would be the secondary borrower, and the co-signer would become the primary borrower.
You would be eligible for an auto loan based on their credit score rather than your own, but they would be in charge of making the payments on the loan if you weren’t able to.
Asking a friend with good credit to co-sign for you might not be harmful if you know one. Make sure you and your co-signer are aware of your respective obligations.
Additional Auto Loan Resources
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* Estimates of annual percentage rates (APR), loan terms, and monthly payments were made using information you provided, lender data, and publicly available data. The estimated APR and other terms are not contractually binding in any way, and all loan information is provided without warranty. Depending on the borrowers’ credit history and other factors, lenders offer loans with a range of APRs. Remember that the lowest rate is only available to borrowers with excellent credit. Your actual APR will be determined by variables including your credit score, loan term, loan amount, and credit history. All loans are subject to credit review and approval. Please review the lender’s Terms and Conditions when evaluating offers for more information.
FAQ
Can you get a car loan with 650 credit score?
A credit score of 650 is regarded as fair, nonprime, and close to prime. The majority of car loan borrowers in Q4 2021 had credit scores above 660, but a car loan with a credit score of 650 is still feasible. Superprime: 781-850. 2. 40%.
What kind of car can I get with a 650 credit score?
You should be eligible for a subprime APR rate with a credit score of 650–659, which will be higher than someone with a 700–800 credit score. With a credit score between 650 and 659, the typical interest rate for a used car loan is 10. 33% (44. 75% higher than the average rate for a new car).
How much of a loan can I get with a 650 credit score?
With a 650 credit score, you can borrow up to $40,000 to $100,000 or more. Your income, your employment status, the type of loan you obtain, and even the lender all play a role in determining the precise amount of money you will receive.
What APR will I get with a 650 credit score car loan?
With a 650 credit score, you might be able to obtain a car loan, but the terms and conditions of the loan may not be to your liking. Your rating is deemed fair, so the typical interest rate you can anticipate paying is 11. 69% for a new car loan.