There is no specific minimum credit score required to buy a car. But the higher your credit score is, the more options you’ll have and the more you’ll save on auto loan interest.
For example, new-car buyers had an average credit score of 714 as of the first quarter of 2017, according to the latest data from Experian. The average used-car buyer had a score of 652. And the average U.S. consumer has a score of 669, according to WalletHub data. Furthermore, people with fair credit pay roughly five times more in auto loan interest than folks with excellent credit.
You can see where you stand by checking your latest credit score for free on WalletHub. And you can learn more about credit scores and car buying below. This includes how your credit score may affect your interest rate, down payment and more.
Check Your Latest Credit Score – 100% Free
Credit Scores & Car Loan Terms
Auto lenders often divide consumers into “prime” categories. Don’t let it fool you. They’re basically the same thing as “excellent,” “good,” “fair/limited” and “bad.” Scores are just grouped a bit differently.
Below, you can see what terms each credit score segment can expect when buying new and used cars.
Credit Scores & New Car Purchases
| Credit Rating | Credit Score | Average APR | Average Loan Amount | Average Loan Payment | Average Loan Term (months) |
| Super Prime | 781-850 | 2.84% | $30,534 | $488 | 62.72 |
| Prime | 661-780 | 3.77% | $28,286 | $513 | 69.74 |
| Nonprime | 601-660 | 6.60% | $31,840 | $525 | 72.64 |
| Subprime | 501-600 | 11.05% | $28,099 | $519 | 72.55 |
| Deep Subprime | 300-500 | 13.98% | $24,920 | $500 | 72.14 |
Experian State of the Automotive Finance Market – Q1 2017
Credit Scores & Used Car Purchases
| Credit Rating | Credit Score | Average APR | Average Loan Amount | Average Loan Payment | Average Loan Term (months) |
| Super Prime | 781-850 | 3.56% | $20,461 | $362 | 61.69 |
| Prime | 661-780 | 5.29% | $20,778 | $357 | 65.49 |
| Nonprime | 601-660 | 9.88% | $18,913 | $363 | 64.93 |
| Subprime | 501-600 | 16.48% | $16,026 | $376 | 61.60 |
| Deep Subprime | 300-500 | 19.62% | $14,385 | $380 | 58.28 |
Experian State of the Automotive Finance Market – Q1 2017
For more interesting car-buying trends, including where to find the best rates, check out WalletHub’s 2017 Auto Financing Report.
5 Credit Score Tips for Car Buyers
There are certain steps that you can take to prep your credit score for car shopping. And there are ways to overcome a low score once you start. Either method can help you save money as well as get behind the wheel sooner.
Here’s what we recommend doing:
- Check your credit score in advance. Seeing where you stand a few months before applying for an auto loan will give you time to improve your score. And that will help you get a better deal.
- Get preapproved before shopping. Pre-approval is important for any car shopper, as it will give you a sense of how much you’ll be able to borrow and, thus, how much car you can afford. It will also give you a bit of bargaining power when dealers start talking financing options.
- Put more money down to make up for a low score. The bigger your down payment is, the less you’ll have to borrow and the less your borrowing history will matter.
- Purchase pre-owned. The average used-car buyer has a far lower credit score than the average new-car buyer. So it figures that your credit score is less likely to hold you back in the land of pre-owned vehicles.
- Buy from a private seller. An individual selling his or her car, perhaps online, probably isn’t going to check your credit. He or she will probably want full payment upfront, though.
The best way to get your credit score in car-buying shape is to sign up for a free WalletHub account. We’ll perform a personalized credit analysis, telling you what to fix, how to fix it and how long it will take.
Get Your Personalized Credit Analysis – 100% Free
Plus, WalletHub is the only site with free credit scores and reports that are updated on a daily basis. So you’ll always know where you stand. And when you’re ready, we’ll help you compare auto loan rates and car insurance policies, too.
Image: Jakkarin chuenaka/Shutterstock