Effective January 1, 2025 to December 31, 2025
The maximum rates available for the financing of vehicles in equal monthly installments are found in the Texas Finance Code, Section 348.104. That section specifies add-on rates for four classes of vehicle. The add-on rate is the actual dollars per hundred per year of finance charge calculated on the amount financed. The age of the vehicle determines the add-on rate to use. This chart converts the add-on rates to equivalent annualized percentage rates for contracts with substantially equal monthly payments.
As an alternative to the add-on rates, Section 348.105 of the Texas Finance Code provides an alternate rate of 18%. The 18% effective rate may also be used as an alternative rate for contracts with repayment terms that are not monthly and not substantially equal in amount.
Caution: Do not confuse add-on rates with APRs. You cannot quote add-on rates to consumers. If the transactions are seller-financed sales tax transactions (sales tax deferred), the “contract rate” shown on the motor vehicle retail installment sales contract cannot exceed the equivalent annualized percentage rates shown below.
Newer Vehicles:
Class 1 and 2
To make this chart simpler, conversions are omitted for Classes 1 and 2 because they result in rates less than the alternate rate of 18% provided by section 348.105 of the Texas Finance Code. The following vehicles fall into Classes 1 and 2:
- Any 2025 or newer vehicle
- Any used motor vehicle not more than two years old
- Any new or used heavy commercial vehicle not more than two years old
Used Vehicles:
Class 3: Add-on rate expressed as contract rate
Vehicles 2022 or 2021 can use the Class 3 add-on rate of $12.50 per hundred per year. Here is the $12.50 add-on rate expressed as equivalent annualized percentage rates for common contract terms:
| 12 Months | 18 Months | 24 Months | 30 Months | 36 Months | 48 Months | 60 Months |
|---|---|---|---|---|---|---|
| 22.32% | 22.50% | 22.42% | 22.23% | 22.01% | 21.53% | 21.05% |
Class 4: Add-on rate expressed as contract rate
Vehicles 2020 or older can use the Class 4 add-on rate of $15.00 per hundred per year. Here is the $15 add-on rate expressed as equivalent annualized percentage rates for common contract terms:
| 12 Months | 18 Months | 24 Months | 30 Months | 36 Months | 48 Months | 60 Months |
|---|---|---|---|---|---|---|
| 26.62% | 26.75% | 26.58% | 26.30% | 25.98% | 25.32% | 24.68% |
The OCCC also provides a month-by-month chart expressing the $12.50 and $15 add-on rates as equivalent annualized percentage rates for contracts with substantially equal monthly payments with terms ranging from 1 to 84 months.
Archived Vehicle Class Years.
Below are the years to be used for each class in a given year. To find the appropriate maximum rate, using the chart below, determine the calendar year and year of the vehicle to find the correct class. Once you have found the correct class, use the charts above to determine the maximum rate.
For example, a 2020 motor vehicle sold in 2024 would be considered a Class 3 vehicle. Financing a Class 3 vehicle in 2024 for 36 months would return a maximum rate of 22.0077%.
| Calendar Year of Vehicle Sale | Class 1 or Class 2 | Class 3 | Class 4 |
|---|---|---|---|
| 2026 | 2024 or newer | 2022 or 2023 | 2021 or older |
| 2025 | 2023 or newer | 2022 or 2021 | 2020 or older |
| 2024 | 2022 or newer | 2021 or 2020 | 2019 or older |
| 2023 | 2021 or newer | 2020 or 2019 | 2018 or older |
| 2022 | 2020 or newer | 2019 or 2018 | 2017 or older |
| 2021 | 2019 or newer | 2018 or 2017 | 2016 or older |
| 2020 | 2018 or newer | 2017 or 2016 | 2015 or older |
| 2019 | 2017 or newer | 2016 or 2015 | 2014 or older |
| 2018 | 2016 or newer | 2015 or 2014 | 2013 or older |
| 2017 | 2015 or newer | 2014 or 2013 | 2012 or older |
| 2016 | 2014 or newer | 2013 or 2012 | 2011 or older |
| 2015 | 2013 or newer | 2012 or 2011 | 2010 or older |
| 2014 | 2012 or newer | 2011 or 2010 | 2009 or older |
| 2013 | 2011 or newer | 2010 or 2009 | 2008 or older |
| 2012 | 2010 or newer | 2009 or 2008 | 2007 or older |
| 2011 | 2009 or newer | 2008 or 2007 | 2006 or older |
| 2010 | 2008 or newer | 2007 or 2006 | 2005 or older |
| 2009 | 2007 or newer | 2006 or 2005 | 2004 or older |
| 2008 | 2006 or newer | 2005 or 2004 | 2003 or older |
| 2007 | 2005 or newer | 2004 or 2003 | 2002 or older |
If you have any questions concerning the financing of motor vehicles, please contact the Office of Consumer Credit Commissioner at 512-936-7600.