Compare accounts
Get guidance
Compare accounts
Get guidance
Money market accounts
Money market accounts are similar to savings accounts, but offer some checking features as well.
Get guidance
Banking
Unlock financial rewards by signing up for a savings or checking account with a bonus offer.
Get guidance
Compare rates
Get guidance
Compare rates
Get guidance
Buying & selling
Knowing what to look for in a real estate agent is critical. Here's how to choose the best fit for your needs.
Get guidance
Compare investments
Get guidance
Compare plans
Get guidance
Finding an advisor
Get guidance
Compare cards
Find my matches
See your card matches
Answer a few quick questions and we’ll show you your top credit card options.
Compare cards
See what the experts say
Read in-depth credit card reviews to find out which cards have the best perks and more.
Get guidance
Get advice
Build credit
Compare lenders
Get guidance
Compare lenders
Get guidance
Compare lenders
Get guidance
Compare lenders
Get guidance
HELOC
A HELOC is a variable-rate line of credit that lets you borrow funds for a set period and repay them later.
Home equity basics
Home equity loans
Home equity loans let you borrow a lump sum at a fixed rate, based on how much of the home you own outright.
Get guidance
Compare rates
Popular states
Compare rates
Popular states
Compare rates
Get guidance
Calculators
Get guidance
We may receive compensation from the companies that appear on this page, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Here’s an explanation for how we make money . Learn more about who we are and our promise to guide you through life’s financial journey.
At Bankrate, we take the accuracy of our content seriously.
“Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
Their reviews hold us accountable for publishing high-quality and trustworthy content.
Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy.
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
Table of contents
Table of contents
The Federal Reserve cut rates in October for the second time in 2025, putting the new target rate at 3.75-4 percent. Interest rates started declining after the final rate cut of 2024, but had crept back up by the end of the second quarter of 2025.
Car prices have increased, and inventory shortages have raised some used car prices close to the average price of new cars. Strong consumer demand, lingering shortages from the COVID-19 pandemic, inflation and consumer preferences have driven these increases. Tariffs on raw materials, as well as on vehicles themselves, are also expected to drive up prices by the end of summer.
To put it simply, auto loan rates aren’t expected to decrease measurably this year. This is primarily due to the continued work by the Federal Reserve to quell inflation, but interest rates for both new and used vehicles have steadily increased since the pandemic began in 2020.
“Rising prices for both new and used vehicles have led more buyers to rely on financing and extend their loan terms at the time of purchase, says Stephen Kates, senior financial analyst at Bankrate. ”While borrowing rates have begun to decline slightly, longer loan terms can result in higher interest rates and substantially increase the total interest paid over the life of the loan.”
But higher interest rates aren’t the only thing making car loans more expensive this year. The average price of a new car was $50,080 in September 2025, according to Kelley Blue Book — an all-time high and the first time the number has topped $50,000.
Industry experts agree tariffs will increase prices for consumers. Existing inventory is declining, and new imports will be subject to tariffs. And as new vehicle prices increase, it’s likely that used vehicle prices will rise with them.
The answer comes down to your needs. If you have a set of wheels in the driveway that get you from point A to point B, it might be smart to stick with what you have. But if you need a vehicle, prepare to spend more money on financing, especially if you have poor credit.
Access to credit is tightening, especially for those with poor credit. While auto loan approval rates increased by 0.2 percent overall, the share of approvals for those with subprime credit fell sharply. Lenders are reacting to inflation, high vehicle prices, high interest rates and growing delinquency rates.
President Trump’s tariffs have also created uncertainty throughout the economy. The auto industry is particularly slow to adapt, and consumers will face even higher vehicle prices. For now, many manufacturers are absorbing these costs, and luring customers with cash-back and employee pricing incentives. However, existing inventory is declining, and new imports will be subject to tariff pricing.
Those impacted most disproportionately are those with poor credit histories, explains Kates.
“Lenders are increasingly wary of rising delinquency rates, which means borrowers with lower credit scores may face tighter loan terms and smaller loan amounts,” Kates explains.
Unlike those with strong credit, bad credit borrowers do not have the leverage to find the best available rates. Borrowers falling under the deep subprime category, between 300 and 500, can expect rates of naerly 16 percent for new cars and over 21 percent for used cars, according to the Experian State of the Automotive Finance Market report.
If you’re looking for a bad credit auto loan, consider securing financing with the help of a cosigner to benefit from better rates.
Average loan amounts increased slightly from $41,720 for a new vehicle in the first quarter of 2025 to $41,983 in the second quarter. While used vehicle prices began stabilizing in early 2025, prices ticked up and average used loan amounts increased to $26,795.
Many borrowers are already feeling squeezed out of the auto market. If prices increase the way they are expected to, many more drivers will find themselves struggling to get behind the wheel. Consumers are facing higher loan amounts and higher monthly payments that could further increase already high interest rates. In addition, down payments have already decreased since the last quarter of 2024 and are likely to continue decreasing as prices rise.
The used car market is also feeling the impact. Prices have been elevated since the COVID-19 pandemic, when chip shortages led to fewer new cars being built. Consumers have also chosen to keep their cars longer rather than pay high prices. Yet as new vehicle prices increase to historic levels, it’s likely that used vehicle prices will rise with them.
You may need to buy a car even when the economy’s set against you. If so, consider the following tips to still walk away with a good deal.
The first time a car shopper learns their credit score shouldn’t be at the dealership financing desk, Kates says. “Planning ahead and improving your financial standing several months in advance can put you in a stronger position to get approved and qualify for a lower annual percentage rate (APR).”
It’s hard to know without a crystal ball, but experts think auto loan interest rates likely won’t come down significantly anytime soon. With that in mind, spend this time building your credit to ensure that no matter what the available rates are you will benefit from the most competitive ones offered.
Why we ask for feedback Your feedback helps us improve our content and services. It takes less than a minute to complete.
Your responses are anonymous and will only be used for improving our website.
Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy.
Table of contents
What is a simple interest auto loan, and how does it work?
How does the Fed interest rate affect car loans?
How to save on auto loans as the federal funds rate changes
Car interest rates may come down as the Fed drops rates
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access
BR Tech Services, Inc. NMLS ID #1743443 | NMLS Consumer Access
© 2025 Bankrate, LLC. A Red Ventures company. All Rights Reserved.
Related Article
