If you’re unable to make your monthly payment by its due date, most lenders charge a late payment fee. They’re typically 1% and 2% of the loan amount and are deducted upfront before the lender disburses your loan. Origination fees cover the processing required to acquire financing for your vehicle. Before you proceed with a loan, make sure you understand all of the potential fees that may appear, including: Conversely, older vehicles have higher interest rates due to their depreciated value.įees can accumulate over time and affect the overall cost of your loan. Newer vehicles generally have lower interest rates because they’re more valuable and in better condition.

Larger down payments typically result in lower rates and lower monthly payments. A down payment of at least 20% is recommended for new cars while only 10% is suggested for older vehicles. Down payments are not required, but they are typically recommended. Higher scores typically result in more favorable terms. Most lenders require a credit score of at least 620 to qualify for an auto loan. The rate you receive is determined by several factors, including: Auto loan rates typically start around 4% to 8%, depending on your lender. Interest rates determine the cost of borrowing money from your lender. Before you take out an auto loan, consider the key factors that determine your ability to repay the loan.