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

: 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. 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 : In most states, bad credit also leads

Data based on reports from Experian and WalletHub for Q4 2025/2026. Those in the "Prime" range (661+) hold roughly

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

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

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