what is the highest an interest rate can be on a used car?

Question

my credit isn't great and the older the cars are, the higher the rate gets. can it go over 24%

Answer 1

The highest an interest rate on any vehicle can go is 29.9%. The law does not allow it to go higher than that.

Answer 2

Usually not, and it depends on how the lender calculate interest rate. It can be either diminishing rate or Flat rate or both.

Normally 8% to 18% percent you can expect for a new vehicle from a commercial bank. or a good vehicle loan company. But in some private lenders may take higher interest rate while dealing a used vehicle.

More over it all depends on your Credit History and you clear history in dealing with the bank in the past.

Usually commercial banks charges interest in a Diminishing Flat based interest calculation.


Some others charges in a clear flat rate calculation. In this case you may feel the interest rate is less, but in actual you are paying almost double than comparing to Diminishing rate.

Answer 3

Yes, it can. When I bought my first car the ONLY place that would finance me was American General Finance. My famiy all has bad credit so I didn't have a cosigner to get a decent loan. MY interest rate was around 28%!! I paid on it for a year and then went to a local bank and borrowed enough to pay it off at 8.5%!

Answer 4

There's no legal limit. YOu may find it makes more financial sense for you to get a late model, modest car (like a ford focus, dodge neon, etc.) instead of a "cheap" older car becuase the inteest rate will balance out the payment and you'll get a better car for the same price.

Answer 5

The laws vary by state. In Florida the cap is determined by the age of the vehicle.

Answer 6

There's no legal limit, but you're crazy if you pay even half that amount.