Same Car, $10,000 More: Subprime Borrowers Pay 19% APR While Prime Gets 9%

The poorest car buyers are losing their cars at rising rates — and the ones still buying are paying a steep credit-score tax. The Auto Wire’s October 19 analysis of Experian’s second-quarter figures lays it out: the average used-car loan is $27,852 over 67.9 months, with an average APR of 8.81% for prime borrowers, 19.10% for subprime borrowers and 21.62% for deep subprime. Applied to the same loan, the prime borrower pays about $522 a month and roughly $7,600 in interest over the life of the loan; the subprime borrower pays about $673 a month and roughly $17,900 in interest.

That is $151 more every month and more than $10,000 more in total for an identical car — charged to the person least able to absorb it. Falling used-car prices make the trap harder to escape: the Bureau of Labor Statistics’ index for used cars and trucks was down 1.5% in the year through September, so a borrower whose car loses value faster than the loan balance shrinks owes more than the car is worth — and researchers at the New York Fed flagged that negative-equity risk in their 2025 analysis. The shortfall typically gets rolled into the next loan or written off after a repossession and billed back to the borrower.

The takeaway for buyers at the edge of the credit spectrum: the interest rate matters more than the monthly payment, and a longer term at a high rate is the most expensive way to buy a car. For everyone else, it’s a window into why delinquencies and repossessions keep climbing — the auto market’s stress is concentrated at the bottom.