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Learn about Good APR

Mark Cappel
UpdatedOct 7, 2007

What would be a typical APR for someone with a moderate credit score? I have a score in the low 600's and got approved for a lo

What would be a typical apr for someone with a moderate credit score. I have a score in the low 600's and got approved for a loan at 16.99%. I thought that was a little high. Can a car dealer work with the bank and get it lower?

Whether or not the 16.99% rate you were quoted is a competitive rate depends greatly on the type of vehicle you are trying to purchase. Generally speaking, the interest rates charged on used vehicle purchases are higher than the rates expected when purchasing a new car, especially if you are financing the vehicle through a manufacturer owned finance company (i.e., Honda Finance). Lower rates are offered on new vehicles because lenders want to encourage buyers to purchase new vehicles, as they usually make more money on new vehicle purchases than on used cars.

There is some pretty good and relevant information on auto loans online at our site.

If you are attempting to purchase a used vehicle, a 16.99% rate is fairly typical given your credit score. However, this does not mean that you should accept this rate without shopping around between several lenders. Do not limit your search for financing to dealerships alone?go to your bank or credit union to ask what rate they can offer given your credit score. Many banks may turn you away because of your low credit score, but if you have a good relationship with a bank or credit union, it certainly does not hurt to ask for a loan. Once you have shopped around, you can form a better idea of the rates you can expect to pay, and then decide which finance company is offering you the best terms.

If you are planning to purchase a new vehicle, a 16.99% interest rate seems a bit high. Auto manufacturers often offer special interest rates for the purchase of new vehicles, so hopefully you will be able to take advantage of one of these special financing plans to purchase your new vehicle at a lower rate. As I mentioned before, the key to finding the lowest interest rate is to shop around to several dealerships to find the one that will offer you the best interest rate.

Dealerships can work with lenders to lower interest rates for their customers, but the banks have the final say as to what loans they will or will not approve. If you find a dealership that you feel is offering you a good deal, you can ask them to put pressure on the finance company to lower the interest rate. But, as I said, the lender has the final say, so it may or may not be willing to offer you a better rate.

If you do not need a new (or used) vehicle immediately, you may want to spend some time attempting to improve your credit score before going forward with the purchase. Visit to obtain a free copy of your credit report from each of the three major credit reporting agencies (Experian, Equifax, and TransUnion). Carefully review your reports to verify that all listings are accurate. If you find any listing which you feel are inaccurate, you should file a dispute with the bureau(s) reporting the erroneous information. The Federal Trade Commission offers a guide to disputing items on your credit report, available at

Also, if time allows, you could establish some new credit lines to rebuild your credit before making a large purchase like a new vehicle. For more information about credit reports, credit scoring, and ideas to improve your credit, I invite you to visit the Credit Resources page .

If you do not have the time to work on your credit before buying a car, I still encourage you to shop around to find the best interest rate and terms available.

I wish you the best of luck in purchasing a new vehicle. I hope that the information I have provided will help you Find. Learn. Save.