Calculating the average APR, or annual percentage rate, on car loans can be a bit challenging. Although the math is simple, the variables aren't. The average car loan APR might not actually have a lot to tell you, because loans vary based on the type of vehicle you buy, the length of your loan and your negotiating ability. Your credit score also can have a significant effect on your rate.

National Average Loan Rates

According to data from Bankrate.com, the national average rate for a 60-month new car loan was 4.04 percent as of Oct. 31, 2013. Shortening your loan to 48 months would drop your rate to 3.95 percent. A 36-month, used-car loan carried an average rate of 4.51 percent.

Credit Scores and Rates

Data from the FICO company tracks car loan rates relative to credit scores. Based on its information, the average rate for a 60-month new car loan as of Nov. 4, 2013, was 3.46 percent if you had a credit score of 720 or higher. The average APR goes up as your credit score goes down, though. While a credit score between 690 and 719 netted you a 4.85 percent loan, having a credit score between 620 and 659 would leave you with a 10.90 percent interest rate. A score in the 500s could lead to a 17.05 percent APR.

Minimizing Your APR

The first step in getting a loan that is as low as possible is to know where you stand by checking your credit. That way, you can fix any issues before you apply. You will also know if the lender is making you a fair offer because, for instance, it can't tell you that you have to settle for a high APR because you have bad credit when you know you actually don't. Once you have your credit ready to roll, the next step is to shop around. Talking to a few lenders, including some banks and credit unions, will give you a sense of what kind of loans are available. If you walk into the dealer with a loan already in place, you won't be at the mercy of the finance office.

Does Interest Matter?

It's true that the lower your interest rate, the more money you save. However, your interest rate isn't the only factor that comes into play in a car loan. The amount you borrow also affects your payments.

For example, if you're looking at two reasonably priced used cars, one costing $8,000 and one costing $9,000, the price difference between them can swallow up a big change in interest rates. For instance, the monthly payment on a $9,000, 48-month loan at 5.24 percent is about $208. However, if you only borrow $8,000 but you get stuck with a 10.30 percent loan, your payment will still be lower -- about $204 per month. With this in mind, shop around for a good loan, but remember that shopping around for a good deal on a car also will save you money.