If you’re in the market for a new or used car, your credit score can have a big impact on the ability to obtain financing and score a low auto loan rate. For example, a great credit score of 781 and above gets you the very best rates, an average of 2.6% in the third quarter of 2016, while a subprime borrower, a credit score of 500 or less, was saddled with 13.53% during the same period.
How Does Credit Score Translate into Dollars Saved on a Car Loan?
Let’s look at the difference the above credit scores can make over the course of a car loan.
SUPER PRIME BORROWER:
$30,000 borrowed over 60 mos. with a 2.6% rate = $534/month
(or $2,025 paid in total interest)
$30,000 borrowed over 60 mos. With 13.53% rate = $691/month
(or $11,446 paid in total interest)
Even the smallest decrease in an auto loan interest rate can have a big impact on money spent over the course of a loan. If you have an auto loan through another institution, visit PartnerColoradoCU.org to learn how you can 0.50% APR discount* off your current rate.
What is the Average Credit Score for an Auto Loan?
If you find you’re neither tip top nor on the low end, you’ll appreciate knowing that the average credit score for new car auto loan applicants near the end of 2016 was 714, while used car buyers came in at 655.
Improving Your Credit Score While Buying a Car
Even if you don’t hit the average credit score mark, or if you have no credit at all, Partner Colorado can help. We offer a Limited/No Credit Auto Loan option that can help you buy a car, improve your credit score and establish a good payment history for future purchases.
Wondering where you’ll land?
Visit PartnerColoradoCU.org to learn more about credit scores, our low rate auto financing and how we can help you buy the car of your dreams.