A good APR (Annual Percentage Rate) for a 72-month car loan can be around 6.74% or lower, depending on factors like your credit score, the type of vehicle (new or used), and the lender. This rate represents a competitive "as low as" offering for loan terms extending up to 75 months.
Understanding APR for Long-Term Car Loans
When securing a car loan, especially for a longer term like 72 months, the APR is a crucial factor that determines the total cost of borrowing. A lower APR means you'll pay less in interest over the life of the loan. While 72-month loans offer lower monthly payments, they typically come with slightly higher interest rates compared to shorter terms due to the extended risk for the lender.
For terms extending up to 75 months, competitive interest rates can be found. Here's a look at some sample purchase APRs based on varying loan terms:
| Payment Period | Purchase APR* "As Low As" | Payment per $1,000 |
|---|---|---|
| Up to 48 Months | 5.74% | $23.37 |
| Up to 66 Months | 6.24% | $17.94 |
| Up to 75 Months | 6.74% | $16.38 |
| Up to 84 Months | 6.99% | $15.09 |
*Note: These rates are "As Low As" and may vary based on individual creditworthiness and other loan criteria.
Factors Influencing Your 72-Month Car Loan APR
Several elements play a significant role in determining the APR you qualify for:
- Credit Score: Your credit score is the primary determinant. Borrowers with excellent credit (typically FICO scores of 720 or higher) usually qualify for the lowest rates.
- Loan Term: As shown in the table above, longer terms like 72 months or 84 months generally have higher APRs than shorter terms (e.g., 48 or 60 months).
- New vs. Used Car: Loans for new cars often have slightly lower APRs than those for used cars due to the lower perceived risk of a newer vehicle.
- Down Payment: A larger down payment reduces the amount you need to borrow, which can sometimes help you secure a better APR.
- Lender Type: Interest rates can vary between different types of lenders, such as credit unions, banks, and dealership financing. It's wise to compare offers from multiple sources.
Tips for Securing a Good APR
To increase your chances of getting a favorable APR for your 72-month car loan:
- Check Your Credit Score: Before applying, obtain a copy of your credit report and score. Dispute any errors to improve your standing.
- Shop Around: Get pre-approved by multiple lenders (banks, credit unions, and online lenders) before visiting a dealership. This allows you to compare offers and negotiate effectively.
- Consider a Larger Down Payment: Putting down more money upfront reduces the loan amount and can make you a more attractive borrower.
- Keep the Term as Short as Possible: While you're looking for a 72-month loan, understanding that shorter terms offer lower rates might inform your decision-making. If you can afford slightly higher payments for a 60-month loan, you could save significantly on interest.
- Beware of Add-ons: Dealers may offer various add-ons that can increase the total cost of your loan. Focus on the car's price and the loan's APR.
By understanding these factors and preparing in advance, you can better position yourself to secure a competitive APR for your 72-month car loan.
