If you walked into a dealership today, you might face an uncomfortable surprise. Even with excellent credit, car loan interest rates could be higher than many drivers expect right now.

For example, say you have a pristine credit score over 750, hoping for a rate under 6%. After all, that’s where new car rates fell from 2011 to 2022, says Investopedia.

You may be in for a reality check

According to U.S. News & World Report’s July data, though, the average interest rate for new car loans in that top credit tier is 10.86%.

For used cars, it climbs slightly higher to 11.11%.

Buyers with “good” credit, in the 700 to 749 range, are seeing average rates of 12.42% for new cars. These are people with solid borrowing histories and low risk, yet the financing terms still seem to carry significant interest costs.

Wait, is this for real?

Thankfully, Experian offers a different perspective

According to the group, first-quarter 2025 numbers show an average interest rate of 5.18% for new car buyers with super prime credit scores of 781 and up.

Across all credit scores, the average new car loan rate lands at 6.73%. That’s considerably lower than the U.S. News numbers, which pull from MyAutoloan, a consumer lending platform.

Used car rates are still high, no matter who you ask

Experian reports an average used car loan rate of 11.87%. 

For deep subprime borrowers, that rate jumps to 21.58%. These borrowers often have scores below 500, and many are priced out of the car market altogether.

So why do two “trusted” sources show such different rates? 

It comes down to methodology. U.S. News uses rates based on real-time offers from lenders on its platform, while Experian pulls data from a broader network of loans already issued. 

The rates differ based on lender type, market segment, and timing. But both sets of data confirm the same trend: Car loan interest rates are elevated, and credit score alone does not tell the whole story.

Auto lenders look at more than just your score

They review your payment history, income, employment stability, down payment size, and even the age and value of the vehicle. 

A newer car with low mileage usually qualifies for better terms. An older car with more than 100,000 miles could result in higher interest or even a declined loan application.

Economic conditions play a major role, too. The Federal Reserve has started lowering interest rates, but the effect on car loans tends to lag. Lenders are still cautious. Some are adjusting slowly due to inflation risk and rising loan defaults.

For car buyers, this means adjusting expectations

A “good” rate in 2025 may be closer to 8 or 9%, not 3 or 4. 

The smart play is to shop around. Credit unions often offer more competitive rates. Getting preapproved before walking into a dealership gives you more control. Making a larger down payment or choosing a shorter loan term can also improve your rate.

Finally, adjusting your expectations might be necessary. It might not be your time to get that six-figure luxury SUV just yet.