What is the average interest rate on a vehicle?

I am 22 and never have purchased a new car. I have no idea what the average or reasonable interest rate should be. What factors are at play for it and how do I make sure I am not getting taken advatage of?|||Auto finance is what I do for a living and this should shed some light on your question.





Below is a list of factors that auto lenders look for.





Factors.


1. Loan to value (LTV).


2. Age of vehicle.


3. Term of loan.


4. Miles on vehicle.


5. Down payment.


6. Time on job.


7. Time at residence.


8. Monthly income before taxes.


9. Credit score/profile.


10. Total debt to income including new payment.





What they look for;





1. Between 85% and 115%.


2. No older then 8-years.


3. 36-72 months.


4. No more then 100,000.


5. 10% of the sales price or $1,000.00.


6. 2-years.


7. 2-years.


8. $1,500.00 to $2,000.00 depending on lender.


9. 540 or above with 4 paid as agreed lines of credit with 1 being a installment loan paid at least 12 times for at least $150.00 a month and in the credit bureaus for at least 3 years.


10. Not to exceed 45%.





Another thing that comes into play is called payment to income ratio so depending on the term of the loan and the interest rate you would have to budget for the payment. Most lenders do not exceed 16%.





As you can see there are to many things to consider without knowing the whole picture.|||It can be zero if you have really good credit. 3% or 4% maybe for fairly good, 12% and up for bad credit. Used cars are higher still.|||Interest rates can vary based on your credit. You should have a general idea of what your credit is like. You have to be careful with car loans, especially used car loans offered by dealerships...Keep in mind that the dealership is a business, even the financing guy... They are in the business to make money, they make money off the car they sell you and they make money off the financing they get you. I have heard of people being offered financing at rates above 20%.


When it comes to credit, keep in mind that there is good credit, bad credit and no credit. If you do not have a credit history, this will count against you to some extent, but it should not carry the same weight as bad credit... If the financing you are offered seems outrageous, it probably is and the funny thing about buying a car... You can walk away, and the car dealer will probably call you within the week trying to work a deal for you. You may want to buy a particular car, but they REALLY want to sell you that car.|||Too many variables.





How high is your existing credit score? How much money do you make?


What kind of price range are you looking for? How much do you have as a down payment?





Go to this site and do your research before you ever set foot on a car dealer's lot.





http://www.kbb.com/kbb/NewCars/default.a鈥?/a>