What Is the Average Car Loan Interest Rate in 2025?
Are you planning to buy a car in 2025? If yes, you are probably wondering what kind of Car Loan interest rate you will qualify for.
However, different lenders offer varying Car Loan interest rates and some may provide more competitive rates than others. Therefore, it is essential to research and compare interest rates to find the best deal.
In this post, we will discuss the average Car Loan interest rate in 2025, the key factors that influence it and how to get the best Car Loan interest rate deal.
Average Car Loan Interest Rate 2025: Factors & Best Deals
Average Car Loan interest rate for new cars
Discover the average Car Loan Interest Rate for 2025, key factors affecting it, and tips to secure the best deal. Compare rates and save on your auto loan!
The average Car Loan interest rate for new cars in 2025 varies from one bank to another and is around 11.75% per annum. However, this is not a fixed rate and you may qualify for a higher or lower interest rate depending on several factors.
The factors that can influence your New Car Loan interest rate usually include your credit score, loan tenure, employment status and relationship with the bank as well as the down payment you make.
In general, you can expect New Car Loan interest rates to range from around 9.45%-14.05% per annum.
It is important to note that in addition to the Car Loan interest rate, you will also have to pay a processing fee and documentation charges for your New Car Loan.
Make sure to ask your lender about all the fees and charges associated with your loan so you can make an informed decision.
Average Car Loan interest rate for pre-owned/used cars
The average interest rates for Used Car Loans are usually higher than those for new cars. This is because lenders consider used cars to be riskier investments since their value drops more quickly.
The average Used Car Loan interest rate in 2025 is around 14.67% per annum.
This rate can fluctuate based on several factors, such as the age and condition of the vehicle, your individual circumstances and the lender’s policies.
Just like with New Car Loans, you will also need to pay additional charges, such as a processing fee and documentation charges, when applying for a Used Car Loan.
Tips to get the best Car Loan interest rate in 2025?
- Check your credit score: A good credit score can make all the difference when it comes to securing a low interest rate. If you have a high credit score, lenders will be more likely to offer you a competitive interest rate.
- Compare your options: Do not settle for the first loan offer you come across. Compare rates from multiple lenders to find the best deal.
- Consider a shorter tenure: Shorter loan tenures often come with lower interest rates which can help you save a substantial amount in the long run.
- Put more money upfront: By making a larger down payment, you will be borrowing less money overall. This can lower your interest rate and save you money on interest payments
- Negotiate: Do not hesitate to negotiate with the lender. If you have a good credit score or are making a large down payment, you can negotiate a lower interest rate.
Conclusion
The average Car Loan interest rates in 2025 are just a starting point. Be sure to consider the loan tenure, processing fees and other charges that may apply.
Ultimately, the key to getting a great car loan deal is to be informed, prepared and proactive. By doing your research, comparing rates and changing loan specifics (such as the loan tenure and amount), you can score a Car Loan that is tailored to your needs and budget.
