To Buy A Car - Do You Need Good Credit

: 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.

While you do not strictly need "good" credit to buy a car, having it significantly reduces the cost and complexity of the purchase. You can secure an auto loan with nearly any credit score, but your score determines your interest rate (APR), required down payment, and overall loan terms. 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

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 : Lower scores often result in shorter loan durations (e

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. You can secure an auto loan with nearly

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