Quick Answer
What are used car loan rates in 2026? Experian's Q2 2026 used-car averages run from 6.29% to 21.62% depending on your credit tier. The national average across all borrowers is approximately 11.19% APR (Experian, Q2 2026). Superprime borrowers (781+) averaged 6.29%, while subprime borrowers (501-600) averaged 19.10%. On a $20,000, 60-month used car loan, the difference between those two averages is about $7,833 in extra interest.
Key Takeaways
- Used car rates run 1.9 to 5.6 percentage points higher than new car rates, depending on credit tier, with the widest gaps at subprime and deep subprime (Experian Q2 2026 tier averages)
- Credit unions averaged lower used car rates than banks, about 2.2 percentage points below banks on a 48-month used-car loan (5.53% vs 7.73%) in NCUA's December 2025 comparison
- Certified Pre-Owned (CPO) vehicles can qualify for manufacturer promotional financing; the rate varies by brand, model and month, so compare the current offer with a standard used-car quote
- Vehicle age affects your rate -- older cars can carry a rate premium that each lender sets for itself, and some lenders shorten the term or decline to finance them
- Keep loan terms at or under 60 months on used cars; the CFPB notes a longer loan keeps you at risk of owing more than the vehicle is worth for longer
- A 20% down payment reduces how much you borrow, and the CFPB notes that increasing your down payment may also decrease your interest rate
Used Car Loan Rates by Credit Score in 2026
Your credit score is a major factor in your used car loan rate. Experian groups borrowers into five tiers by VantageScore 4.0, and its tier averages differ widely. The table below gives Experian's Q2 2026 average used-car APR for each tier, from its State of the Automotive Finance Market, with the payment and interest on a $20,000, 60-month loan at each average. Experian's Q2 2026 used-car average is 11.19% APR across all credit profiles, ranging from 6.29% at superprime to 21.62% at deep subprime.
| Credit Tier | Score Range | Avg Used Car APR | Monthly Payment ($20K, 60 mo.) | Total Interest |
|---|---|---|---|---|
| Superprime | 781 - 850 | 6.29% | $389 | $3,362 |
| Prime | 661 - 780 | 8.81% | $413 | $4,800 |
| Near-prime | 601 - 660 | 13.93% | $465 | $7,878 |
| Subprime | 501 - 600 | 19.10% | $520 | $11,195 |
| Deep subprime | 300 - 500 | 21.62% | $548 | $12,884 |
Source: Experian, "Used Car Loan Rates" and "Average Car Loan Interest Rates by Credit Score" (Q2 2026 data, both updated September 10, 2026). These are averages across all loans in each tier, not quotes; your rate depends on lender, vehicle, down payment, and loan term. Payments use the standard amortization formula; interest is the exact payment times 60, less the $20,000 borrowed.
The Credit Score Gap:
On a $20,000, 60-month used car loan, the difference between the superprime average (6.29%) and the deep subprime average (21.62%) is about $9,522 in extra interest. Moving up one credit tier saves about $1,438 to $3,316 over the life of the loan at these averages.
Used Car Rates vs. New Car Rates: How Much More Do You Pay?
In Experian's Q2 2026 averages, used-car loans carry higher rates than new-car loans in all five credit tiers. Experian attributes the premium mainly to used cars being more likely to break down, which affects the lender's investment. Understanding the gap helps you make informed decisions about whether the lower purchase price of a used car offsets the higher financing cost.
| Credit Tier | Avg New Car APR | Avg Used Car APR | Rate Premium (Q2 2026 avg.) |
|---|---|---|---|
| Superprime | 4.41% | 6.29% | +1.88 pts |
| Prime | 6.15% | 8.81% | +2.66 pts |
| Near-prime | 9.71% | 13.93% | +4.22 pts |
| Subprime | 13.52% | 19.10% | +5.58 pts |
| Deep subprime | 16.11% | 21.62% | +5.51 pts |
How the premium is derived: each tier's Experian Q2 2026 average used-car APR minus its average new-car APR (for example, superprime 6.29% minus 4.41% is 1.88 percentage points). Both APR columns are Experian's Q2 2026 tier averages.
When the Used Car Still Wins on Total Cost
Despite higher rates, a used car can cost less overall because the purchase price is lower. Consider this illustration, with assumed prices and rates:
| Factor | New Car | Used Car (3 years old) |
|---|---|---|
| Purchase price | $35,000 | $22,000 |
| Interest rate (assumed) | 5.5% | 8.0% |
| Loan term | 60 months | 48 months |
| Monthly payment | $669 | $537 |
| Total interest | $5,112 | $3,780 |
| Total out-of-pocket | $40,112 | $25,780 |
In this scenario, the used car saves $14,332 in total costs despite a higher interest rate, because the lower purchase price more than compensates for the rate premium. For a detailed side-by-side analysis, see our new vs. used car buying guide.
Used Car Rates by Lender Type
Where you borrow matters too. Different lender types price used car loans differently, but the only public comparison of average rates by lender type we found is NCUA's, which covers credit unions and banks. For online lenders, dealer-arranged financing and buy-here-pay-here lots, compare the APR in each written offer.
| Lender Type | Average Used Car Rate (48-month) | Best For | Key Advantage |
|---|---|---|---|
| Credit Union | 5.53% | Members seeking lower rates | Lower average rate than banks (NCUA) |
| Bank | 7.73% | Existing customers | Ask about existing-customer pricing |
| Online Lender | No public average found | Convenience shoppers | Ask whether pre-qualification uses a soft inquiry |
| Dealer Financing | No public average found | One-stop shoppers | Convenience; manufacturer financing on CPO vehicles (Experian) |
| Buy-Here-Pay-Here | No public average found | Borrowers with bad credit | In-house dealer financing; Experian warns it can be very expensive |
Source: NCUA, Credit Union and Bank Rates 2025 Q4 (opens in new tab), national averages for December 26, 2025 -- the most recent quarter NCUA had published when we checked on September 29, 2026. NCUA does not break these averages out by credit score. We found no public survey that publishes average rates for online lenders, dealer-arranged financing or buy-here-pay-here lots.
Credit Union Advantage:
In the National Credit Union Administration's (NCUA) latest comparison, for December 26, 2025, credit unions averaged 5.53% on a 48-month used-car loan against 7.73% at banks -- about 2.2 percentage points lower. On a $20,000, 60-month loan, if a credit union quoted 6.5% and a dealer 9.5% (illustrative rates, not quotes), the credit union saves approximately $1,723 in total interest ($3,479 against $5,202). Use the NCUA Credit Union Locator(opens in new tab) to find one near you.
How Vehicle Age and Mileage Affect Your Rate
Not all used cars are priced the same by lenders. The vehicle's age and mileage directly influence the rate you receive, the maximum term available, and whether certain lenders will finance the purchase at all.
Experian says that "as a car gets older and racks up more miles, you may expect higher interest rates," and that "many lenders may not even finance a vehicle if it's older than 10 years or has more than 100,000 miles." Beyond that, each lender sets its own vehicle-age and mileage rules -- the rate premium, the longest term it will offer, and the oldest model year it will finance -- and we found no public average of any of them. Ask each lender how the model year and mileage change your rate and term.
Newer and Lower-Mileage Cars
Because rates can rise with age and mileage, a newer, lower-mileage used car may qualify for better financing terms, and a recent model may still be eligible for a manufacturer's certified pre-owned program. Compare the price difference with the financing difference before you decide.
Certified Pre-Owned (CPO) Rates: The Best of Both Worlds
Certified Pre-Owned programs bridge the gap between new and used car financing. CPO vehicles undergo manufacturer-inspected reconditioning and come with extended warranty coverage, and manufacturers sometimes pair them with promotional financing that a standard used car does not get. The offer varies by brand, model and month, and we found no public survey of average CPO rates, so the example below uses illustrative rates.
| Factor | Standard Used Car | CPO Vehicle |
|---|---|---|
| Financing rate | Lender's standard used-car rate (prime tier averaged 8.81% in Experian Q2 2026) | Manufacturer promotional rate on some models; varies by brand and month |
| Manufacturer warranty | Expired or limited | Extended (varies by brand) |
| Inspection standard | Varies by dealer | Manufacturer's multi-point inspection (the checklist varies by brand) |
| Vehicle condition | Varies widely | Must meet the program's standard |
| Vehicle age and mileage | Any age | Within the program's age and mileage limits (set by each brand) |
| Return/exchange policy | Only if the dealer offers one; federal law does not require a cancellation period (FTC) | Varies by program; get it in writing |
CPO Savings Example:
If a CPO promotion offered 5.5% against a standard used car rate of 8.5% (illustrative rates, not quotes), a $22,000, 60-month loan would save approximately $1,868 in total interest and reduce the monthly payment by about $31. A CPO vehicle may cost more than an equivalent non-CPO car, so compare that price difference with the financing saving and the value of the warranty.
7 Strategies to Get the Lowest Used Car Loan Rate
Your used car loan rate is not fixed by market conditions alone. These seven strategies can help you secure a lower rate.
1. Improve Your Credit Score Before Applying
A credit score improvement that moves you up a tier can save thousands. Moving from the near-prime used-car average (13.93%) to the prime average (8.81%) on a $20,000, 60-month loan saves approximately $3,079 in total interest (Experian Q2 2026 tier averages). Steps you control include paying down credit card balances to lower your credit utilization, disputing credit report errors, and avoiding new credit applications in the months before your car purchase.
2. Get Pre-Approved from 3+ Lenders
Apply to at least three lenders inside one rate-shopping window -- the inquiries then count as a single hard pull on your credit report. Newer FICO versions pool them across 45 days (opens in new tab); older FICO versions and VantageScore use 14 days, so 14 days is the target that is safe under every model. Start with a credit union, add an online lender, and include your primary bank. Use the lowest offer as leverage when negotiating dealer financing. See our complete guide to getting the best auto loan rate.
3. Choose a Credit Union
Credit unions are member-owned, not-for-profit institutions, and NCUA says they offer lower loan rates on average than banks. In the NCUA's latest comparison, for December 26, 2025, credit unions averaged 5.53% on a 48-month used-car loan against 7.73% at banks -- about 2.2 percentage points lower. If you are not already a member, NCUA notes that many credit unions accept members through an employer, a family member, or where you live, work or attend school -- check the NCUA Credit Union Locator(opens in new tab).
4. Consider a CPO Vehicle
As the section above explains, CPO vehicles can qualify for manufacturer promotional rates that standard used cars usually do not get, though the offer varies by brand, model and month. If the vehicle you want is eligible for a CPO program, compare the CPO price premium against the financing savings on total cost.
5. Keep the Loan Term at 48-60 Months
Published averages show little rate difference between terms. The Federal Reserve's G.19 release (opens in new tab) put the commercial-bank rate at 7.14% for a 60-month new-car loan and 6.97% for a 72-month loan in Q2 2026, and it publishes no used-car or 48-month rate. In NCUA's December 2025 comparison, credit unions averaged 5.41% on a 36-month used-car loan against 5.53% on a 48-month one. The case for a short term is total interest and equity: at the same rate a shorter loan costs less interest, and the CFPB notes that a longer loan puts you at risk of having negative equity -- owing more than the vehicle is worth -- for a longer period of time.
6. Make a Down Payment of 20% or More
A larger down payment -- 20% or more -- reduces your loan-to-value (LTV) ratio. The CFPB notes that increasing your down payment may also decrease your interest rate, and Experian that putting money down reduces the risk to the lender; the size of any rate difference varies by lender. On a $20,000 vehicle, a 20% down payment ($4,000) means you finance only $16,000 -- reducing both your monthly payment and total interest significantly.
7. Shop for Newer, Lower-Mileage Vehicles
Experian says that as a car gets older and racks up more miles, you may expect higher interest rates, and that many lenders may not finance a vehicle older than 10 years or with more than 100,000 miles. If you have flexibility in your vehicle choice, ask how a slightly newer model year changes the rate and term you are offered.
How Loan Term Affects Your Used Car Rate and Total Cost
Loan term changes both your payment and your total cost. Experian says shorter repayment terms typically command lower interest rates, though the published averages in Strategy 5 above show little difference between terms, so the rates in the table are illustrative, not published averages.
| Loan Term | Illustrative Rate | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|---|
| 36 months | 6.5% | $613 | $2,068 | $22,068 |
| 48 months | 7.0% | $479 | $2,992 | $22,992 |
| 60 months | 7.5% | $401 | $4,060 | $24,060 |
| 72 months | 8.5% | $356 | $5,632 | $25,632 |
| 84 months | 9.5% | $327 | $7,468 | $27,468 |
How to read this table: each row assumes a $20,000 loan. The monthly payment is the standard level-payment figure rounded to the nearest dollar, and total interest and total cost are derived from that rounded payment (payment × months, less the $20,000 borrowed) — so every row can be checked with a calculator.
The level-payment formula behind every row is documented on our loan calculator methodology page -- our auto loan calculator has no separate methodology page of its own.
Negative Equity Risk:
The CFPB notes that a longer loan puts you at risk of having negative equity -- owing more than the vehicle is worth -- for a longer period of time. If you need to sell or trade in the car while you are "underwater," you still owe the difference, and the CFPB warns that rolling that balance into a new loan makes the new loan more expensive.
Refinancing Your Used Car Loan
If you are currently paying a rate well above the average for your credit tier, refinancing can save you money. Ask prospective lenders what they need before they will refinance, such as a completed title transfer.
When Refinancing a Used Car Loan Makes Sense
- Your credit score has moved up a tier since the original loan
- You accepted dealer-arranged financing and suspect a dealer markup
- The average for your tier now sits well below your rate, by enough to outweigh any refinancing fees
- You are in the first half of your loan term -- refinancing saves the most when more of each payment still goes to interest
Refinancing Savings Example
An illustration on assumed rates (13.0% and 7.5%), not quotes or averages:
| Scenario | Original Loan | Refinanced Loan |
|---|---|---|
| Remaining balance | $16,000 | $16,000 |
| Interest rate | 13.0% | 7.5% |
| Remaining term | 48 months | 48 months |
| Monthly payment | $429 | $387 |
| Remaining interest | $4,604 | $2,569 |
| Total savings | -- | $2,034 |
Run this example in the Auto Loan Calculator (the original loan at 13.0%)
Run this example in the Auto Loan Calculator (the refinanced loan at 7.5%)
For a deeper look at when refinancing makes sense, see our guide to refinancing your car loan.
5 Costly Mistakes When Financing a Used Car
Avoid these common errors that lead used car buyers to pay thousands more than necessary:
- Focusing only on monthly payment. The FTC warns that low monthly payment offers "often have longer loan periods and higher interest rates, which means they're much more expensive overall." A $300/month payment over 84 months ($25,200 in total) costs more than a $400/month payment over 48 months ($19,200). Always compare total cost, not just the monthly number.
- Accepting dealer financing without comparison shopping. The CFPB describes dealer markup as a higher rate than the one the lender approved, charged at the dealer's discretion, and Experian notes that dealer-arranged financing could result in a higher rate due to dealer markups. Get pre-approved before visiting the dealership.
- Skipping the vehicle history check. Undisclosed accident history, flood damage, or title issues can reduce a vehicle's value. Check a vehicle history report, and the FTC recommends paying for an independent mechanical inspection, since a history report typically will not list mechanical problems.
- Financing too much of the vehicle's value. The more of the price you borrow, the sooner the loan can exceed the car's value. A down payment of 20% or more lowers that risk.
- Ignoring the total cost of ownership. Maintenance and repairs, fuel, and any gap in warranty coverage add up. Factor in estimated maintenance expenses alongside the monthly payment when budgeting.
Frequently Asked Questions
The average used car loan rate in 2026 depends heavily on your credit score. Experian's Q2 2026 used-car averages were 6.29% for superprime borrowers (781-850), 8.81% for prime (661-780), 13.93% for near-prime (601-660), 19.10% for subprime (501-600) and 21.62% for deep subprime (300-500). The national average across all credit tiers is approximately 11.19% for used vehicles per Experian's Q2 2026 State of the Automotive Finance Market report.
Yes. Used car loan rates run about 1.9 to 5.6 percentage points higher than new car rates, depending on credit tier, with the widest gaps for subprime and deep subprime borrowers (Experian Q2 2026 tier averages). On a $20,000, 60-month loan, the difference between an illustrative new car rate of 5.5% and used car rate of 8.0% adds approximately $1,410 in extra interest. Experian attributes the gap mainly to used cars being more likely to break down, which affects the lender's investment.
Yes, but you will pay significantly higher rates. Experian's Q2 2026 used-car averages were 19.10% for subprime borrowers (501-600) and 21.62% for deep subprime (300-500). Consider improving your credit score before buying, making a larger down payment (20% or more), getting a co-signer, or getting a credit-union quote to compare.
Experian's advice is to pick the shortest repayment term you can afford without sacrificing other important financial goals. At the same rate, a shorter term costs less in total interest, and the CFPB notes that a longer loan puts you at risk of having negative equity for a longer period of time. Avoid terms longer than 60 months on used vehicles because the car may need major repairs while you are still making payments.
Get pre-approved from at least three lenders inside one rate-shopping window, so the inquiries count as one. Newer FICO versions pool auto loan inquiries made within 45 days; older FICO versions and VantageScore use 14 days, so finishing inside 14 days is protected under every model. In NCUA's latest comparison (December 2025), credit unions averaged 5.53% on a 48-month used-car loan against 7.73% at banks. A 20% down payment reduces your loan-to-value ratio, and the CFPB notes that increasing your down payment may also decrease your interest rate. Also consider Certified Pre-Owned (CPO) vehicles, which can qualify for manufacturer promotional financing, and a newer, lower-mileage car: Experian says rates can rise as a car gets older and racks up more miles.
Yes. Many lenders charge higher rates for older vehicles, but each lender sets its own premium, and we found no public average of its size. Experian notes that many lenders may not finance a vehicle older than 10 years or with more than 100,000 miles. The vehicle's age can also shorten the longest term a lender will offer; ask each lender how the model year changes your rate and term.
CPO vehicles can qualify for manufacturer-backed promotional financing that a standard used car usually does not get, but the rate varies by brand, model and month, so check the manufacturer's current CPO offer rather than assuming a fixed discount. CPO programs also include extended warranty coverage. A CPO vehicle can cost more upfront, so compare the total cost of both options.
Your Next Steps
- Check your credit score for free through your bank or at AnnualCreditReport.com
- Look up your tier's average rate in our auto loan rates by credit score guide
- Get pre-approved from 3+ lenders within 45 days -- 14 days to be safe under every scoring model (credit union, online lender, bank)
- Research CPO options -- check whether the car you want qualifies for a manufacturer's CPO program and its current financing offer
- Calculate your payment using our auto loan calculator to compare different rates and terms
- Read our negotiation guide on getting the best auto loan rate before visiting the dealer
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Sources
- Federal Reserve - Consumer Credit (G.19 Report)(opens in new tab)
- Experian - State of the Automotive Finance Market, Q2 2026: average used-car APR by credit tier (published September 10, 2026)(opens in new tab)
- Consumer Financial Protection Bureau - Auto Loans(opens in new tab)
- National Credit Union Administration - Credit Union and Bank Rates 2025 Q4 (December 26, 2025; latest edition as of September 29, 2026)(opens in new tab)
- FTC - Buying a Car(opens in new tab)
- myFICO - Loan Savings Calculator(opens in new tab)
- myFICO - Rate Shopping: the 45-day window on newer FICO versions, 14 days on older ones(opens in new tab)
- VantageScore - FAQs: VantageScore 4.0 counts inquiries within a 14-day window as a single inquiry (read September 29, 2026)(opens in new tab)
- Experian - Average Car Loan Interest Rates by Credit Score (Q2 2026 new and used tier averages; vehicle age, mileage, down payment and term; published September 10, 2026)(opens in new tab)
- CFPB - What things can I negotiate when shopping for a car or auto loan? (down payment; longer loans and negative equity; last reviewed August 28, 2023)(opens in new tab)
- CFPB - Should I trade in my car if it's not paid off? (rolling negative equity into a new loan; last reviewed September 12, 2023)(opens in new tab)
- CFPB - Fact sheet on dealer markup in indirect auto lending (March 2013)(opens in new tab)
- FTC - Buying a Used Car From a Dealer (low-payment offers, independent inspections, return policies; updated December 9, 2025)(opens in new tab)
- NCUA (MyCreditUnion.gov) - What is a Credit Union? (not-for-profit, member-owned, lower loan rates on average; last modified February 4, 2025)(opens in new tab)
Important Disclaimer
Disclaimer: This content is for educational and informational purposes only and does not constitute financial, tax, or legal advice. Individual circumstances vary, and you should consult with a qualified professional before making financial decisions. Interest rates shown are published averages from the sources named, or illustrative rates where labelled, and may not reflect rates offered by specific lenders. Actual rates depend on credit score, loan amount, term, vehicle type, age, mileage, down payment, and lender policies. While we strive for accuracy, rates and market conditions change frequently. Data sources: Experian Q2 2026 State of the Automotive Finance Market; Federal Reserve G.19 Consumer Credit. Rate data current as of September 2026. Experian's Q2 2026 figures (published September 10, 2026) were the most recent edition when this page was verified on September 28, 2026. Experian releases roughly two months after quarter-end, so a newer edition may exist by the time you read this — check the source before relying on any specific tier average.
Content reviewed by Mark at Markco Labs. Learn more about our accuracy standards.