Used Car Loan Rates in May 2026
Used car loan interest rates currently range from 6.5% to 9.5%, with most lenders averaging around 7.8% for a 60-month loan. Your exact rate depends on your credit score, down payment, loan length, and which lender you choose.
Here's what affects your rate:
| Credit Score Range | Typical Rate | Monthly Payment on $15,000 |
|---|---|---|
| 750+ | 6.5% to 7.2% | $283 to $288 |
| 700-749 | 7.3% to 8.1% | $289 to $300 |
| 650-699 | 8.2% to 8.9% | $301 to $309 |
| Below 650 | 9.0% to 9.5% | $310 to $315 |
Why Used Car Rates Are Higher
Used vehicles typically carry higher interest rates than new cars for two reasons. First, they have less predictable value and higher default risk. Second, used cars may need repairs sooner, making them riskier collateral for lenders.
How to Get the Best Rate
Make a larger down payment. Putting down 20% or more lowers your borrowed amount and shows lenders you're serious. This can reduce your rate by 0.5% to 1%.
Shop with multiple lenders. Banks, credit unions, and online lenders offer different rates. Getting quotes from at least three sources takes 15 minutes and can save you hundreds of dollars.
Improve your credit first. If your score is below 700, paying down debt or disputing errors before applying could bump your rate down significantly.
Choose a shorter loan term if possible. A 48-month loan typically has a lower rate than a 72-month loan, though your monthly payment will be higher.
Comparing to New Car Rates
New car loans currently average 5.8% to 7.2% for the same credit profiles, meaning used car buyers typically pay 1% to 2% more in interest. Over a five-year loan, this difference can add up to $800 to $1,500 in extra interest.
Next Steps
Check your credit score before applying. Get pre-approved through your bank or credit union before visiting a dealership. Dealership financing often costs more because they mark up the rate and earn a commission. Using Sidekick's tools, you can compare total ownership costs across different vehicles and financing options to find the deal that truly works for your budget.