A car loan's interest rate is the percentage charged of the total amount you borrow, also known as principal. Interest rates are a common topic regarding car loans, but they don't tell the whole story of how much you'll owe during the loan term. 

To profit from the funds lenders provide to car buyers, they charge interest rates and additional fees. APR reflects these additional costs to borrowers, specifying an annual rate they'll have to pay. 

APR, expressed as a percentage, usually ranges from around 2 percent to 20 percent, depending on several factors. When determining the APR, lenders consider elements like credit score, debt to income ratio, as well as the age and miles of the car. 

When you’re looking for great terms on an auto loan, it pays to go with Shift. Shift works with nine different national lenders that compete for customers’ business, so you get the best rate. And applying for a loan with Shift is easy too, with no cost or obligation. 

Understanding auto loans and auto loan interest rates may take a lot of time and attention, but with their experience and expertise in selling used vehicles, Shift makes financing your next car easy. Shift works with a network of trusted lenders, ensuring you get the best deal.

When lenders provide funds for auto loans, they're looking for borrowers they can trust to pay them back in full. The best indicator of a car buyer's financial reliability is their credit score and a determining factor in what APR they'll receive.

A buyer with a high credit score illustrates their excellent financial responsibility, and consequently, lenders reward this with lower APR rates. Since lenders have additional assurance someone with a high credit score will pay back their loan, they don't need to protect themselves with high interest rates and fees.

But customers with low credit scores represent a financial risk to lenders, and because of this, are charged a higher APR to insure against default. 

Keep in mind that lenders look at different credit scores from varying sources, so what you think your score is might be different from what they see. 

You can get an idea of how you may appear to lenders by obtaining a credit report from one of the major credit bureaus, like Experian or Equifax. 

It can be a hassle financing a used vehicle, but Shift makes it easy. Applying for financing with Shift is simple and free of cost or obligation. If you need extra assistance, you’ll receive one on one attention to guide you through the financing process.

Depending on whether the applicant has a good credit score or a bad credit score, a good APR may mean different things to different people. But maybe you've had financial challenges over the years, resulting in a low credit score. If you need a new vehicle and have to finance the purchase, even a higher APR of around 15 percent can seem like a good deal. And even if you're only able to secure a loan with a high APR, paying it off will improve your credit score in the long term. 

Depending on your credit score, being realistic about the APR you'll qualify for can help you better understand what you can expect to pay. 

When you finance with Shift, you have the option of a longer-term loan. This not only lowers your monthly payments, but helps you get behind the wheel of a vehicle you might have thought was outside of your budget. And with lower monthly payments, you have extra money around for other important expenses.

Like buying almost anything, it's essential to remember that you should submit loan applications within a relatively small window, like 14 days. Each time you apply for a loan, lenders perform a hard inquiry on your credit. If too many of these occur over a more extended period, it can lower your credit score. But when you limit your applications to a narrow time frame, credit bureaus look at it as a single occurrence.

Something else you can try is raising your credit score. When you obtain your credit report, paying off past obligations and fixing disputed transactions can be beneficial. You can also be diligent about paying your bills for a length of time, hopefully increasing your score in the process.

For extra reassurance, any used car you buy from Shift has a seven-day refund policy. In case you aren't fully satisfied with your purchase, you're able to return it with no questions asked.

While APR is a significant aspect of an auto loan, the definition of a good rate depends on the borrower. While someone with an excellent credit score can expect to secure the best rates available, those with lower scores might be content with ones that are simply reasonable.

In the end, what is a good APR for a car is contingent on how serious the buyer is about moving forward on a car purchase, as well as what they're willing to spend. 

Shift's website has a large selection of fully inspected used cars located across the country that are ready to go. The website is user-friendly, and you'll be able to find various makes and models to suit your needs and budget.