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Brian McKay

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Brian is the Co-Founder of MonitorBankRates.com. For over 18 years, he has utilized his background in enterprise infrastructure to engineer proprietary systems that track rates from over 8,000 financial institutions.

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| August 25, 2026 | 5 min read

Auto Loan Rates Turn Lower for Both New and Used Cars

Used auto loan rates fell 0.166 points to 6.503% this week and new auto loan rates eased 0.055 points to 5.778%. The used-car average is now below where it stood in late July.

Average car loan rates moved in borrowers' favor this week. Used auto loan rates fell 0.166 points to 6.503% APR, a drop large enough to erase the category's August climb and leave the average below where it stood in late July. New auto loan rates eased 0.055 points to 5.778% and still carry the lowest rates of the three categories we track. The difference between new and used financing, which had widened all summer, narrowed to 0.725 points.

Used auto loan rates fall below their late-July level

Auto loan rates by category, national average APR since late March

Average APRs from MonitorBankRates.com's nightly collection, the same series this report's figures come from, updated daily.

At 6.503%, used auto loan rates gave back more this week than they had added since late July, and the average now sits 0.055 points below its July 27 reading. New auto loan rates eased to 5.778%, a smaller move in the same direction that leaves them slightly above their late-July level. A single week doesn't establish a direction, and used auto loan rates spent the whole summer proving they can climb; next week's data will show whether this drop was a turn or a pause.

The general auto category, loans that lenders list without specifying new or used, was the only line to rise, inching up to 6.469%. The usual caution applies to this one: because the category is defined by what lenders choose not to label, its average moves with the mix of lenders and products in it, not just with pricing. The clearly labeled new and used categories remain the better guide to where auto loan rates actually moved.

A smaller payment on the same $25,000 loan

Financing $25,000 over 60 months at this week's used-car average works out to about $489 a month, roughly $2 a month less than the same loan at last week's average, about $117 over the life of the loan. The same balance at the new-car average runs about $481 a month, so financing a used car still adds about $8.45 a month from the rate alone, before the prices of the vehicles enter the picture. Manufacturer incentives on new vehicles often push the real-world difference wider than the averages show.

Change since August 19, by loan category (percentage points)

This report's averages, August 19 to August 25. Green bars fell; red bars rose.

Auto loan rates this week: August 19 vs. August 25

A rate drop the Fed had nothing to do with

The Federal Reserve has not met since July 29, when it held its benchmark at 3.50% to 3.75% for a fifth straight meeting with three members preferring a quarter-point increase, and it does not meet again until September 15 and 16. Nothing about this week's decline came from policy; lenders repriced on their own. More than one thing could explain it: competition for loan volume, steadier used-vehicle resale values, or lenders giving back part of the summer's run-up in used-car financing. The September meeting is the next event with the power to move the whole market at once.

The loan sets the payment; insurance rides along

Every financed vehicle comes with a second recurring number: the lender requires full coverage until the loan is paid off, so the insurance premium is part of the real monthly outlay for as long as the financing runs. Average car insurance rates vary far more from state to state than auto loan rates do, and our MBR Auto Insurance Burden Index ranks all 50 states by how heavily those premiums weigh on drivers. If you're comparing loan offers this week, put an insurance quote for the specific vehicle next to them; on many vehicles it swings the total monthly number more than the rate difference between two competing lenders.

What this means if you're financing a car

A falling average is an invitation to shop, not a reason to wait. These figures are averages across every credit tier and vehicle age, and the difference between an average rate and a strong offer, often from a credit union, is usually larger than anything that changes week to week; a well-qualified buyer financing a late-model used car routinely does better than 6.503%. Walking into a dealership with an approved rate in hand also gives you something to negotiate against. Buyers comparing local lenders can line up Ohio auto loan rates against these national averages, and the full history behind every figure here is on our auto loan rate trends page.

The bottom line for car buyers

Used auto loan rates posted a real decline this week, and new auto loan rates edged lower with them. Whether the declines continue is a question for next week's data. The averages on this page describe the market, not your offer: the lender you choose, your credit profile, and the age of the vehicle will move your number more than any one-week change here. Get a quote or two before the dealership hands you theirs.