The Average Person Overpays on Their Car Loan by Nearly Double (Do This Instead)
By GOBankingRates Staff
Unless you happen to be flush with cash, chances are you’ll need a loan when you buy your next car. But here’s the thing — most of us also aren’t auto-loan experts. And dealerships count on that.
The result? The average person ends up paying almost twice as much in interest as they need to.
But here’s a smarter option: When you use a credit union like PenFed, you could get an auto loan with interest rates that are nearly half the national average.
How to Pay Nearly Half the Interest on Your Car Loan
According to Experian’s State of the Automotive Finance Market, the average interest rate on a new car loan in the first quarter of 2025 was 6.73%. For a used car? 11.87%.
Compare that to PenFed Credit Union. Rates on a new auto loan through the car buying service start as low as 3.89% APR — nearly half the average rate for a new auto loan. That kind of difference can save you thousands over the life of your loan.
How it Works
It’s simple to use PenFed Credit Union. First, see if you pre-qualify for a loan. Just enter some basic information about the type of loan you’re interested in and how you plan to buy your vehicle.There’s no credit impact and no membership required to check1.
You don’t need to pick a car first. You can apply even if you’re still shopping, and PenFed offers loan amounts of up to $150,000 with a variety of terms to fit your specific needs.
You can even use PenFed’s interactive calculator to decide which loan terms are best for you and estimate your monthly payment.
How to Get Started
Interested in buying a vehicle? Don’t overpay like the average person does. Find a loan at nearly half the average interest rate.
It’s easy to get started here to check your rate in just a few minutes and see how much you could save on your loan.
1 The initial inquiry will be a soft pull that will not affect your credit score. If you choose to initiate a loan application after checking your rates, you will be required to authorize a full credit report inquiry, which would be considered a hard pull and may affect your credit.
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