Auto Loan Rates by Credit Score (2026)
Auto lenders use credit tiers to set interest rates. The higher your score, the lower your rate — and the lower your monthly payment. Here's what average rates look like across credit tiers for a new car loan in 2026:
| Credit Tier | Score Range | Avg. New Car APR | Avg. Used Car APR | Monthly Payment* |
|---|---|---|---|---|
| Super Prime | 781–850 | 5.08% | 6.82% | $377 |
| Prime | 661–780 | 6.89% | 9.04% | $393 |
| Near Prime | 601–660 | 9.62% | 13.72% | $418 |
| Subprime | 501–600 | 12.85% | 18.97% | $447 |
| Deep Subprime | 300–500 | 15.62% | 21.55% | $472 |
*Monthly payment based on $25,000 new car loan, 60-month term. Source: Experian State of the Automotive Finance Market Q4 2025. Rates subject to change.
The real cost of bad credit: A borrower with a 580 score (subprime) pays roughly $70 more per month than a 750-score borrower on the same $25,000 car loan — that's $4,200 extra over 5 years.
Minimum Credit Score Requirements by Lender Type
Traditional Banks and Credit Unions
Most traditional banks (Chase, Bank of America, Wells Fargo) prefer credit scores of 660 or higher for auto loans. Credit unions are generally more flexible and may approve scores as low as 580–600, especially for existing members.
Online Auto Lenders
Online lenders like Capital One Auto Navigator, myAutoloan, and RateGenius specialize in a wider range of credit scores, including subprime borrowers. Capital One Auto Navigator allows you to pre-qualify with a soft pull and see real offers at dealerships before you shop.
Dealership Financing
Dealerships work with a network of lenders and can often find financing for borrowers with scores as low as 500. However, dealership financing often comes with higher rates than going directly to a lender. Always compare the dealer's offer against pre-approved financing before signing.
Buy-Here-Pay-Here Dealerships
These dealerships finance cars in-house with no credit check. The trade-off is extremely high interest rates (often 20%–30%), older vehicles, and limited selection. Avoid these unless you have no other option.
Best Auto Loan Lenders for Bad Credit (580–620)
How to Improve Your Auto Loan Rate
1. Improve Your Credit Score Before Applying
Even a 20–30 point improvement in your credit score can move you into a lower rate tier. Paying down credit card balances (reducing utilization) is the fastest way to boost your score — it can show results within 30 days. See our guide: How to Improve Your Credit Score Fast.
2. Make a Larger Down Payment
A down payment of 10–20% reduces the lender's risk and can result in better rates, especially for subprime borrowers. It also reduces your monthly payment and total interest paid.
3. Get Pre-Approved Before You Shop
Getting pre-approved from a bank, credit union, or online lender before visiting a dealership gives you negotiating power. You know your rate and budget before the dealer tries to upsell you on financing.
4. Choose a Shorter Loan Term
Shorter loan terms (36–48 months vs. 72–84 months) typically come with lower interest rates. While monthly payments are higher, you pay significantly less interest overall.
5. Consider Refinancing Later
If you can't get a good rate now, buy the car you need and refinance in 12–18 months after improving your credit score. RateGenius specializes in auto loan refinancing for borrowers who want to lower their rate.
Pro tip: Rate shopping for auto loans within a 14-day window counts as a single hard inquiry on your credit report. Apply to multiple lenders in the same two-week period to compare offers without extra score damage.
Frequently Asked Questions
Can I get a car loan with a 600 credit score?
Yes. A 600 credit score puts you in the near-prime tier. You'll qualify for auto loans from most online lenders and many dealerships, though rates will be higher than for prime borrowers. Expect APRs of 9%–14% for new cars and 13%–18% for used cars.
Is it better to finance through a dealer or a bank?
In most cases, getting pre-approved through a bank, credit union, or online lender first gives you a better rate than dealer financing. Dealers mark up rates to earn a profit. Always compare both options before signing.
How much car can I afford with bad credit?
Financial experts recommend keeping total car expenses (payment + insurance + maintenance) below 15–20% of take-home pay. With bad credit and higher rates, buying a less expensive used car and making a larger down payment is usually the smarter financial move. Use our loan calculator to estimate payments.