Do: You Need Good Credit To Buy A Car

In 2026, most lenders categorize borrowers into five tiers. Those in the "Prime" range (661+) hold roughly 70% of all car loans. Credit Rating Score Range Avg. New Car APR Avg. Used Car APR ~4.7% – 5.3% ~6.8% – 7.2% Prime ~6.4% – 6.8% ~9.4% – 9.9% Nonprime ~9.0% – 11.0% ~12.0% – 14.0% Subprime ~12.0% – 14.0% ~16.0% – 19.0% Deep Subprime

If your score is below 660, experts from NerdWallet and Consumer Reports suggest these steps to improve your odds: How Your Credit Score Affects a Car Purchase do you need good credit to buy a car

: In most states, bad credit also leads to higher car insurance rates. Strategies for Buying with Lower Credit In 2026, most lenders categorize borrowers into five tiers

: Lower scores often result in shorter loan durations (e.g., capped at 48–60 months) to reduce lender exposure. New Car APR Avg

Data based on reports from Experian and WalletHub for Q4 2025/2026.

: A borrower with a score in the 500s might pay over $11,400 in interest on a $20,000, five-year loan—more than double the $5,500 paid by someone with a score in the 700s.

: A 100-point difference can change your monthly payment by $50 to $150 on a $25,000 loan.