Advertisement
Find a Car
Go!

Michigan Offers Cheapest Auto Loans, Rhode Island Is Most Expensive:

Follow Richard

Best & worst states for financing a new car (July 2013)

Best & worst states for financing a new car (July 2013)

Enlarge Photo

Yesterday, we told you how all 50 states rank when it comes to the cost of car ownership. Now, the folks at GoBankingRates.com have published a related set of rankings, based on one of the biggest factors in ownership costs: interest rates on auto loans

The average auto loan rate is the U.S. is currently 3.65 percent. On the whole, drivers out West have a better shot at getting a low-interest car loan, while those in the North East pay considerably more -- typically 4 percent or above.

ALSO SEE: Repo Man Finds Himself Out Of A Job As More Pay Car Loans

That said, the cheapest place to take out an auto loan is in America's car capital, Michigan, boasting an average interest rate of just 3.03 percent. That number can fall even further if drivers finance their rides through credit unions, where the state's lowest rate on a 48-month loan clocked in at just 1.49 percent.

All told, the five cheapest states for loans are:

  • Michigan (3.03%)
  • Oregon (3.04%)
  • Alaska (3.04%)
  • New Hampshire (3.08%)
  • South Carolina (3.15%)
READ MORE: 2012 Jeep Grand Cherokee Investigated For Fire Risk

At the other end of the scale, we find Rhode Island, where the average auto loan comes with an interest rate of 5.11 percent. With the exception of New York and Maine, other states in the North East didn't fare much better. Here are the five most expensive states for auto financing:

  • Rhode Island (5.11%)
  • Connecticut (4.82%)
  • New Jersey (4.47%)
  • Massachusetts (4.21%)
  • Louisiana (4.20%)

If you're in the market for a new car, take our advice and secure your auto loan before heading off to the showrooms. You'll have time to explore a wider range of options, giving you a better chance to score a better rate.

DON'T MISS: Would You Buy A Car From Google? You May Soon Have The Chance

When you go at it the other way -- shopping first, then securing a loan -- you can find yourself over a barrel. For starters, you'll often be pressured to buy immediately: "I've got three other people looking at that same car this afternoon!" That, in turn, can lead you to arrange financing through the dealership, which is usually a terrible idea. As CarsDirect's Christian Gulliksen points out, "The rate a dealer presents may not be the rate a bank offered – dealers often add a point or two and pocket the difference as profit."

Got any other tips for saving cash on car loans? Or maybe some horror stories of your own? Share them in the comments below.

___________________________________________

Follow The Car Connection on FacebookTwitter and Google+.

Posted in:
Advertisement
 
Follow Us

 

Have an opinion?

  • Posting indicates you have read this site's Privacy Policy and Terms of Use
  • Notify me when there are more comments
Comment (1)
  1. Thank you for posting this information, it is very important for car buyers to understand what they may expect to find when it comes time to finance a car.

    I have spent a lot of time writing a library full of articles and blog posts designed to educate car buyers in the buying and negotiation process. The first article I suggest you read about interest rates is: http://www.federalautoloan.com/Understanding-Car-Loan-Interest-Rates.aspx

    I think the worst feeling as a car buyer is to have that doubt in the pit of your stomach as you sit in the salesman's office. Even worse, after you've had time to cool off and you realize you've been taken to the cleaners. Make sure you are fully prepared before walking on the lot!
     
    Post Reply
    +1
    Bad stuff?

 

Have an opinion? Join the conversation!

Advertisement
Try My Showroom
Save cars, write notes, and comparison shop with hi-res photos.
Add your first car
Advertisement
Take Us With You!
   
Advertisement

More From High Gear Media


 
 
© 2014 The Car Connection. All Rights Reserved. The Car Connection is published by High Gear Media. Stock photography by Homestar, LLC. Send us feedback.