When you get an auto loan, you will hear a lot about interest rates, annual percentage rates, APR, and the like. Some people will qualify for low car loan rates while others might pay higher rates for their loan. You want to pay the lowest interest rate possible. 

At Arbor Financial Credit Union, we offer car loan rates as low as 1.49% and going up to 5.49%. The chart below shows our APR in relation to the loan term.

Product Term Interest Rate Annual Percentage Yield
2022-2021 Up to 36 months 1.49%
37 - 48 months 1.74%
49 - 60 months 2.49%
61 - 72 months (Call for details) 2.99%
73 - 84 months (Call for details) 3.49%
85 - 96 Months (Call for details)* 4.49%
2020-2015 Up to 36 months 1.49%
37 - 48 months 1.74%
49 - 60 months 2.49%
61 - 72 months (Call for details) 2.99%
73 - 84 months (Call for details) 3.74%
85 - 96 months (Call for details)* 4.49%

¹Annual Percentage Rate (APR). Rates disclosed are the lowest rates available and are determined by your credit score at the time of application. Rates subject to change.

*85 - 96 month term is available to borrowers with a maximum vehicle age of two years, with a minimum loan amount of $45,000, and with qualifying credit. Call for details.​


Why does the annual percentage rate for an auto loan vary so much? Many factors go into determining this critical number. Here, we’ll outline both what an auto loan rate is and factors that help a lender determine your rate. 

What Is An Auto Loan Rate?

An auto loan rate is the interest rate you have to pay annually to borrow the money to purchase your car. 

There is a base interest rate that only factors in the cost of the car, along with an annual percentage rate that includes the total amount you pay to buy the car, including interest and fees. It’s important to note that comparing the base interest rate and the annual percentage rate is not an even comparison because the annual percentage rate will always be higher. 

You will usually see the auto loan rate expressed as APR. For example, you might see a rate written as 3.5% APR. 

A lower interest rate will lead to a lower monthly loan payment, whereas a higher interest rate will lead to the opposite. 

Here’s a real-life example comparing two different rates. The car in this example costs $25,000 and has a 60-month term.  

Auto Loan #1

APR: 3.11%

Total Loan Payment: $27,449

Total Cost of Monthly Payment: $457

Auto Loan #2

APR: 5.54%

Total Loan Payment: $28,679

Total Cost of Car Loan: $478


Though the interest rate only increases by 2.43% between loan one and loan two, that equates to paying an additional $1,230 over the full term for the loan with the higher interest rate. 

Factors Impacting Car Loan Rates

There are many reasons why auto loan rates vary. Here are some of the factors that can impact your rate.

Credit History

According to Credit.com, there are three credit designations.

Superprime - 800 to 850 credit score 

Prime - 750 to 620 credit score

Subprime - Less than 620 credit score


Those with a superprime designation will have the lowest APR, while those with a subprime designation have the highest APR, and therefore, pay the most for their auto loan. 

In 2018, subprime borrowers had an average interest rate of 14.06%, while those with good credit had an average 4.95% interest rate. 

Loan Term

Your loan term is the period over which you take out your loan. It can range from 12 months to as long as 96 months, with the average duration being 72 months. 

Lenders typically charge a higher interest rate for longer loan terms. That’s because the more it’s extended, the lower the likelihood that they will recoup all of their money. Therefore, they increase their interest rate to get more of their money back upfront. 

Type Of Car

If you buy a new or newer car, you will likely qualify for a lower interest rate or even zero percent financing. Used cars generally have a higher interest rate because they tend to have a lower resale value. 

The lender considers this factor because if you default on your loan, they might have to resell your vehicle. 

Auto Loan Lender

The auto loan lender you choose to finance the loan can greatly impact your auto loan rate. Whether you choose a dealership, bank or credit union, you want to find a lender that will offer you the best rate because it can significantly affect how much you pay each month and throughout the loan term. 

Credit unions are well known for offering the lowest interest rates and working with your financial situation to get you the best rate possible.  

Get Competitive Auto Loan Rates Now!

When you decide it’s time to get an auto loan, you want to be sure to pay attention to more than the sticker price on the car and how much you can negotiate the price with the car salesperson. 

You will have the most leverage if you get pre-approved for an auto loan and go to the dealership with your financing intact. 

Learn More About Auto Loans


When it comes to the right mortgage, Arbor makes you feel right at home.

Learn More