Maximize Your Savings on New Car Loans with a High Credit Score

Myron Hansen
Published Sep 6, 2025


In today's market, new car buyers face the challenge of navigating rising vehicle prices and increased financing rates. 

However, one area under a buyer's control is their credit score, which can significantly impact the total loan cost—potentially resulting in savings of over $10,000.

The interest rate on a car loan can fluctuate by more than 10% based on the borrower's credit score. A superior FICO credit score, which ranges between 720 and 850, can secure the lowest annual percentage rates (APRs) by demonstrating to lenders that the borrower is low-risk. 

Conversely, a score closer to 500 may result in double-digit APRs or a complete denial of the loan, especially for scores under 600.

Credit Score Impact on Car Loan APR and Monthly Payments

According to FICO, here are the average APRs offered across different credit score brackets:
 
  • 720-850: 7.5%
  • 690-719: 8.65%
  • 660-689: 10.42%
  • 620-659: 12.57%
  • 590-619: 16.94%
  • 500-589: 17.8%

Considering the average new car price of $48,644 (as per Kelley Blue Book) with a 15% down payment and a 60-month loan term, monthly payments would range as follows:
 
  • For scores 720-850: $829
  • For scores 690-719: $851
  • For scores 660-689: $887
  • and so forth, with a stark difference in total interest paid, ranging from $8,366 to $21,370 based on the credit score.

Improving Your Credit Score

Enhancing your credit score involves adopting prudent credit habits over time. On-time payments, which influence 35% of your score, are crucial. 

A study by LendingTree in 2023 showed individuals with scores above 800 consistently pay their bills promptly.

Other factors include maintaining a low credit utilization ratio (30% of your score) and having a diversified credit mix (auto loans, mortgages, credit cards). Length of credit history also plays a role, suggesting the benefit of keeping accounts open for extended periods.

By focusing on these areas, borrowers can potentially save thousands on car loans by qualifying for lower interest rates.

Financial Wellness and Money Management

For those looking to achieve financial wellness and secure savings on significant purchases like cars, it's essential to understand the psychology of money, stress management, and the development of healthy financial habits. 

Remember, starting the journey toward financial security today can have lasting benefits, including significant loans for purchases like a new car.

Related Read: Boosting Well-being Through Savings: Insights from a Study

However, if you are on the brink of hardship and can’t afford your auto loan payments, explore our multitude of articles that can help you navigate auto loan relief options!

Check out our resources here.

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