When planning to buy a car in 2025, it’s important to understand the changing car loan interest rate trends. Whether you’re looking at a brand-new vehicle or a pre-owned one, knowing how the car loan interest rate behaves can save you a lot of money. Let's take a closer look at what borrowers should keep in mind this year.

In 2025, experts are seeing a mixed trend when it comes to car loan interest rate patterns. After a few years of rising rates, things are finally starting to settle down a little. However, that doesn’t mean getting a low car loan interest rate is automatic. Banks and finance companies are being extra careful before approving loans, and they are offering different rates based on the applicant’s credit score, employment stability, and the type of car you are planning to buy.

For used vehicles, the used car loan interest rate is slightly higher than loans for new cars. This is because lenders consider old cars riskier investments. In 2025, the average used car loan interest rate has been reported to be about 1.5% to 2% higher than the new car loan interest rate. If you are planning to purchase a second-hand car, you must be ready for slightly higher monthly payments compared to buying a new one.