Quick Answer — Auto Loan Rates in Texas
Auto loan rates in Texas average about 7% APR new and 11% used in 2026 (Edmunds) — the same national, credit-driven rates as everywhere else. What makes Texas distinct is the upfront cost: a 6.25% state sales tax plus title and registration fees. Texas also has the highest average car payment in the U.S. at $867/month (LendingTree).
~7%
Avg new-car APR
~11%
Avg used-car APR
6.25%
TX sales tax
$867/mo
Avg TX payment
Financing a car in Texas costs about the same in interest as it does anywhere else — auto loan APR is set by national credit markets, the Federal Reserve, and your credit score, not by state law. Where Texas stands apart is on the bill at the dealership: a 6.25% motor vehicle sales tax, plus title and registration fees, all due upfront. Texas drivers also carry the largest auto loan balances in the country, which is why the state's average monthly payment leads the nation. This guide breaks down the real 2026 numbers so you can budget accurately.
Run your own Texas car payment — rate, term, tax, and down payment
Open the Auto Loan Calculator →What Are Auto Loan Rates in Texas in 2026?
Auto loan rates in Texas track the national averages because APR is driven by your credit tier and the lender, not the state. New-car loans average about 7% APR and used-car loans about 11% in 2026, according to Edmunds (March 2026); Experian's Q4 2025 State of the Automotive Finance Market reports 6.37% new and 11.26% used. The single biggest factor in your rate is your FICO Auto Score tier.
| Credit Tier | Score Range | New Car APR | Used Car APR |
|---|---|---|---|
| Super-prime | 781–850 | 4.66% | 7.25% |
| Prime | 661–780 | 6.84% | 9.40% |
| Non-prime | 601–660 | 9.78% | 14.10% |
| Subprime | 501–600 | 13.00% | 18.95% |
| Deep subprime | 300–500 | 16.01% | 21.55% |
Source: Experian State of the Automotive Finance Market, Q4 2025. Super-prime new (4.66%) and deep-subprime new (16.01%) are reported figures; intermediate tiers are based on the reported tier spread. Rates apply nationally, including Texas.
Taxes & Fees on a Car Purchase in Texas
Texas charges a 6.25% motor vehicle sales and use tax on the purchase price, according to the Texas Comptroller (2026), plus title and registration fees collected by your county tax office. These are upfront costs, separate from the loan interest. Here is what they add to a typical $35,000 vehicle:
| Charge | Rate / Amount | On a $35,000 car |
|---|---|---|
| Motor vehicle sales tax | 6.25% of price | $2,187.50 |
| Title application fee | ~$33 (county-set) | $33.00 |
| TxDMV processing & handling | $4.75 | $4.75 |
| Annual registration (passenger) | ~$50.75 + local fees | $50.75 |
| Dealer documentary fee (max) | Up to $225 (OCCC cap) | ≤ $225.00 |
| Estimated tax + fees | ≈ $2,501 |
Sources: Texas Comptroller — Motor Vehicle Sales and Use Tax (2026); TxDMV registration fee chart 2026; Texas OCCC documentary fee rule. County tax offices add local fees, so totals vary by county. The $225 doc fee is a presumed-reasonable cap, not a required charge.
Worked Example: Financing a $35,000 Car in Texas
Financing a $35,000 car in Texas with the 6.25% sales tax and fees rolled into the loan gives an amount financed of about $37,500, which at the prime-tier 6.84% APR over 72 months works out to roughly $635 per month. Here is the breakdown:
| Line item | Amount |
|---|---|
| Vehicle price | $35,000 |
| + Sales tax (6.25%) | $2,188 |
| + Title, registration & fees | ≈ $313 |
| Amount financed | ≈ $37,500 |
| APR (prime tier) | 6.84% |
| Term | 72 months |
| Estimated monthly payment | ≈ $635 |
| Total interest over the loan | ≈ $8,200 |
Putting money down or rolling fewer fees into the loan lowers both the payment and the total interest. A larger down payment also reduces the time you spend underwater on the loan.
Try your own price, rate, and term — including the 6.25% Texas tax
Open the Auto Loan Calculator →How to Get a Lower Auto Loan Rate in Texas
The fastest way to a lower rate is moving up a credit tier, since the gap between tiers dwarfs anything you can negotiate at the dealer. Practical steps:
- Pull your FICO Auto Score before shopping. Super-prime borrowers (781+) averaged 4.66% on a new car versus 16.01% for deep subprime — more than 11 points apart (Experian, Q4 2025).
- Get pre-approved by a credit union or bank. Texas has hundreds of credit unions that consistently beat dealer financing, which often marks the buy rate up by 1 to 2 points.
- Choose a shorter term. A 72-month loan lowers the payment but raises total interest; a 48- or 60-month term saves thousands and keeps you out of negative equity sooner.
- Put more down. A larger down payment shrinks the amount financed (including the 6.25% tax you might otherwise roll in) and signals lower risk.
- Rate-shop within 14 days. Multiple auto-loan inquiries inside a 14-day window count as one under FICO scoring.
Auto Loan Rates in Other States
APR is national, but sales tax, fees, and average payments differ by state. Compare Texas with other major markets, or see the national picture:
Frequently Asked Questions
What are auto loan rates in Texas in 2026?
Auto loan rates in Texas average about 7% APR on a new car and 11% on a used car in 2026 (Edmunds, March 2026), in line with Experian's national figures of 6.37% new and 11.26% used. APR is set mainly by your credit tier and the lender, not by the state, so a Texas borrower with super-prime credit (781+) can still land near 4.66% on a new car (Experian, Q4 2025). What makes Texas distinct is the upfront cost: a 6.25% state sales tax plus title and registration fees.
How much is sales tax on a car in Texas?
Texas charges a 6.25% motor vehicle sales and use tax on the purchase price, according to the Texas Comptroller (2026). On a $35,000 car that is $2,187.50. On top of that you pay a title application fee of about $33, a $4.75 TxDMV processing and handling fee, and an annual registration fee of about $50.75 for a standard passenger vehicle (plus local county fees). Dealers may also add a documentary fee, capped at a presumed-reasonable $225 by the Texas OCCC.
Why is the average car payment in Texas so high?
Texas has the highest average monthly car payment in the country at $867, which is 15.5% above the national average, according to LendingTree (2026). The reason is mostly buying behavior, not interest rates: Texans tend to finance larger, more expensive trucks and SUVs and carry the largest auto loan balances in the nation. The auto-loan delinquency rate in Texas is about 6.1% (LendingTree, 2026).
How can I get a lower auto loan rate in Texas?
Pull your FICO Auto Score and get pre-approved by a credit union or bank before visiting a dealer, since credit unions consistently offer the lowest rates and dealer financing often marks the rate up by 1 to 2 points. Moving up one credit tier saves more than haggling: super-prime borrowers averaged 4.66% on a new car versus 16.01% for deep subprime (Experian, Q4 2025). A larger down payment and a shorter term also cut your total interest.
Does Texas set its own auto loan interest rates?
No. Auto loan APR is driven by national credit markets, the Federal Reserve's benchmark rate, and your individual credit profile, not by Texas law. Texas does set maximum finance charge rates for motor vehicle installment contracts through the Office of Consumer Credit Commissioner, but in practice market rates for most buyers sit well below those ceilings. The state-specific cost of buying a car in Texas is the 6.25% sales tax and registration fees, not the interest rate.