The best way to calculate the maximum car loan you could get is to use an auto loan interest rate calculator.  The math is quite difficult for most of us, and that’s why these calculators exist. It should help you determine whether you will be facing high, low or average auto loan interest rates based on your credit history.

 

 

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HOW DO YOU CALCULATE INTEREST ON A CAR LOAN?

 

 

Just because current auto loan rates vary, it doesn’t mean you can’t do some calculations to see what your interest rates would be.  While it can be confusing to figure out how a lender calculates interest on a car loan, you can reduce the confusion with simpler numbers.  Of course this is easiest with an auto loan interest rate calculator, but we’ll give it a try.

 

One reason that it is so confusing is that interest rates are not a flat fee.  When you pay the interest rate each month, you are paying a percentage based on how much is in the original loan.  

 

A loan calculator takes this into account by using an amortization schedule. This computes the amount of interest a person is paying per month and the amount of principal they are paying off per month. As the principal goes down, the interest rate percentage of the monthly payment is slowly reduced.  We don’t see the change because our payments stay the same. What is happening is that the principal loan is moving closer and closer toward being paid off.  

 

The auto loan calculator can take all of this into account.  You can make comparisons such as this.  A 6 percent interest rate on a $30,000 loan will cost $2,856 over three years. The same loan terms over 72 months would cost almost $6,000 in interest.  This is how you can begin to determine how much you want to pay per month and how a higher payment or shorter loan term may benefit you. 

 

 

That’s why an auto loan interest rate calculator is so helpful. It can help you determine your interest rate, based on the credit score you enter into the calculator.  Then it will do this math to help you determine what payments would be.

 

 

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HOW DOES NO BULL FINANCING COMPARE ON INTEREST RATES?

 

That’s a great question.  No Bull Financing was designed to be competitive when it comes to auto loan interest rates. We know we won’t earn trade if our rates are higher than the marketplace. We also know that customer service is how you get customers and how you keep them. That’s why we work hard to get the best auto interest rates we can for our customers.

 

If you need more information on current auto loan rates, we recommend getting pre approved for a loan with Earnhardt Auto Centers. Then you can talk to our staff about the best rates and how to get them for your auto loan. It does not commit you to taking a loan and making a purchase.

 

 

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WHAT IS THE AVERAGE CAR INTEREST RATE?

 

It is difficult to state what the average car interest rate is because it varies according to a number of factors.  However, according to Investopedia, auto interest rates on a Super Prime car loan would be around 2.34 percent. That’s for a score from 781 - 850. It rises to 3.48 percent with a score of 661-780.  It rises to 6.61 percent with a score from 601 to 660.

 

When a credit score drops below 600, auto interest rates enter subprime territory.  The average interest rate in this category is 11.03 percent.  If the credit score is from 300 to 500, the rate is 14.59 percent.  Keep in mind that rates may be higher than this. These are just estimates.  

 

 

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WHAT IS THE BEST WAY TO NEGOTIATE THE INTEREST RATE ON A CAR LOAN?

 

According to the Consumer Financial Protection Bureau, a federal government agency, you should try to negotiate the interest rate for your car loan.  A dealership group, such as ours, works with many lenders.  The first rate you are quoted might be the best deal we can see, but it may not be the best deal to you.  We can work together to find the best interest rate that you qualify for.  Never hesitate to ask to compare terms and get more information.  

 

Of course,  you can also compare interest rates quoted to you from individual lenders. Be sure to look at the payment levels and the length of the loan when negotiating interest rates. You don’t want to end up paying more when you are negotiating for better terms. Our No Bull Financing application can reveal interest rates, payment amounts and other important data for you.

 

 

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HOW COMMON ARE ZERO INTEREST CAR LOANS?

 

A zero interest car loan is special indeed, and these special offers are definitely not common. It is offered only on new cars through the new car manufacturer. If you qualify for this at one of our Earnhardt dealerships, we say more power to you!  However, zero interest loans are not a common everyday occurrence. Plus, manufacturers generally require very high credit scores for a person to qualify.