Current Auto Loan Rates in Tennessee, by Credit Tier
The latest national benchmark data, broken down by credit tier for both new and used vehicles, plus what it actually means for your monthly payment and total loan cost.
As of the most recently published quarterly data (Q1 2026), the national average interest rate is 6.39% APR on new-vehicle loans and 11.43% APR on used-vehicle loans. Your actual rate depends heavily on your credit tier — the gap between the best and worst tier runs over 11 points on new loans and over 15 points on used. The full breakdown by tier, plus what it means for your monthly payment, is below.
Average APR by Credit Tier
These are national averages from Experian's State of the Automotive Finance Market report for Q1 2026, the most recent quarter published. They're benchmarks, not a quote — your actual rate depends on the specific lender, loan term, and vehicle, and can land above or below your tier's average. Find the row closest to your own credit score to see the range you should realistically expect to shop within.
| Credit Tier | FICO Range | New APR | Used APR |
|---|---|---|---|
| Super Prime | 781–850 | 4.55% | 6.30% |
| Prime | 661–780 | 6.23% | ~7.0–9.5% |
| Nonprime | 601–660 | 9.67% | 14.03% |
| Subprime | 501–600 | 13.44% | 19.42% |
| Deep Subprime | Below 500 | 16.01% | 21.77% |
Source: Experian State of the Automotive Finance Market, Q1 2026. Used-tier Prime figure reflects a broader published market range rather than a single point estimate. Not in the nonprime, subprime, or deep-subprime range? See our bad-credit financing guide for what to expect and how to strengthen your application.
Average Monthly Payment & Loan Term
Loan terms keep stretching longer: more than a third of new-vehicle loans now run 72 months or longer, up from under a third a year earlier. A longer term lowers the monthly payment but increases total interest paid — worth weighing against your rate, not just your budget.
What a Tier Actually Costs You Per Month
To make the table above concrete: here's the same $28,000 loan amount at a 72-month term, calculated at each tier's average new-vehicle APR. Only the rate changes between these figures — everything else about the loan is held constant.
The spread from super prime to deep subprime on this example is $163 a month — roughly $11,700 over the full 72-month term. That's the real financial weight of the rate gap in the table above, not just an abstract percentage difference.
Are Rates Rising or Falling?
Auto loan rates are still elevated by recent-history standards, sitting near a four-year high after the Federal Reserve raised its benchmark rate to combat inflation. But the direction within that has been mixed: used-vehicle rates have actually eased somewhat, down from an average of 12.36% in Q1 2024 to 11.43% in Q1 2026, while new-vehicle monthly payments have kept climbing — up 2.9% year-over-year to a record $770, as buyers stretch into longer terms to manage affordability.
The practical takeaway: don't wait for a dramatic rate drop before financing. The bigger lever within your control is your credit tier and down payment, both of which move your rate more than the broader market has moved in the past two years.
For perspective on how much rates have shifted: the average new-car rate was around 3.88% at the end of 2021, before a series of Federal Reserve rate hikes pushed borrowing costs up across the board. Today's 6.39% average reflects roughly two and a half points of that increase — a meaningful jump, but one that's held roughly steady rather than continuing to climb over the past couple of years.
Where Most Approved Buyers Actually Land
National data doesn't break rates out by state, so the table above is the best available benchmark for a Gallatin buyer — but it's worth knowing where the typical approved borrower sits before you compare your own quote against the market average.
That doesn't mean lower scores don't get approved — they do, every day, at the nonprime, subprime, and deep-subprime rates shown above. The "average" buyer just skews toward the stronger end of the credit spectrum, which is why a quote below prime can feel discouraging if you're comparing it to the overall market average rather than to your own tier.
Why the Gap Between Tiers Is So Wide
An 11-point spread on new loans and a 15-point spread on used loans isn't a punishment — it's how lenders price risk. A super-prime borrower has a long track record of on-time payments across many accounts, so the lender's odds of getting repaid in full are high. A deep-subprime borrower is a bigger unknown, so the rate compensates for that uncertainty across the lender's whole portfolio, not any one loan.
Used-vehicle loans run higher than new at every tier for a related reason: the vehicle itself carries more resale-value risk as collateral, on top of the borrower's credit profile. That's true even for a super-prime buyer, which is why the tier column moves but the new-vs-used gap stays roughly consistent across the whole table.
Vehicle age compounds this further within "used" itself: a certified pre-owned model just off a lease typically prices closer to the new-loan end of a lender's used-rate range, while an older, higher-mileage vehicle sits closer to the top of it. Two used vehicles at the same price can carry meaningfully different rates for exactly this reason.
What Moves You Within Your Tier
- Debt-to-income ratio. How much of your monthly income already goes toward existing debt payments.
- Loan-to-value. How much you're financing relative to the vehicle's actual worth.
- Employment and residence stability. A longer track record at a job or address can strengthen an application within the same score tier.
- Loan term. A shorter term often carries a slightly lower rate than a longer one at the same tier.
- Local sales tax. Tennessee's combined state and local rate runs around 9.25% in Sumner County, and most buyers roll it into the amount financed — which affects the total loan amount and payment, not just the sticker price.
That's also why shopping more than one lender matters even within a single tier: two lenders can price the same risk profile differently based on their own portfolio needs and risk appetite that quarter, and the only real way to know is to compare actual offers side by side rather than assume the first number you're quoted is the best one available.
Find your credit tier, then compare the average rate to whatever offer you're evaluating — from us or anywhere else. If a quoted rate sits meaningfully above your tier's average, it's worth asking why, or getting a second quote. Want to see where you'd actually land? Read how the full approval process works, then apply.
Frequently Asked Questions
Q1 What are current car loan rates in TN?
National benchmark data for Q1 2026 shows an average of 6.39% APR on new-vehicle loans and 11.43% APR on used-vehicle loans, with rates ranging from roughly 4.5% for super-prime borrowers up to over 20% for deep-subprime borrowers depending on tier and vehicle age. See the full table above for your specific tier.
Q2 How often is this rate data updated?
Experian publishes its State of the Automotive Finance Market report quarterly. This page reflects the most recently published data at the time it was last updated — Q1 2026.
Q3 Why is my quoted rate different from the table above?
These are national averages across every lender and vehicle type, not a quote. Your specific rate depends on the lender, loan term, vehicle, down payment, and the exact details of your credit file, so it will land somewhere around — not exactly at — your tier's average.
Q4 Is it cheaper to finance a new or used vehicle?
New-vehicle loans carry a lower APR than used at every credit tier, since the vehicle itself is lower-risk collateral. That doesn't always mean a lower total cost, though — a used vehicle's lower purchase price can offset a higher rate, depending on the specific deal.
Rate, payment, and term figures on this page reflect national averages from Experian's State of the Automotive Finance Market, Q1 2026, the most recently published quarterly report at the time this page was last updated. They are benchmarks for comparison, not a quoted offer, and will be refreshed as newer quarterly data becomes available.
See Where You Actually Land
Benchmarks are a starting point — a secure application gets you a real number. Apply online in a few minutes and our finance team will compare offers across our lender network.