A captive standard rate is the everyday rate a manufacturer's own finance company charges, set by credit tier and loan term. It applies to nearly every new car the brand sells, any day of the year, with no special program required.
Most manufacturers own a finance company that exists to finance and lease their cars: Mercedes-Benz Financial Services, BMW Financial Services, Toyota Financial Services, Honda Financial Services, Ford Credit, and GM Financial are a few. Because they finance only their own brand, they are called captive lenders, and franchise dealerships work with them every day.
The captive lender publishes a rate sheet to its dealers. The rate depends on two things: your credit tier and the length of the loan. The best tier earns the lowest rate, and rates rise as the tier drops and the term gets longer.
| Credit tier | Typical score range | Where the rate lands |
|---|---|---|
| Top tier | 740 and up | Lowest standard rate |
| Tier 1 | 700 to 739 | Slightly higher |
| Tier 2 | 660 to 699 | Higher |
| Tier 3 | 620 to 659 | Higher still, with tighter term limits |
| Tier 4 | Below 620 | Highest, and not every term is available |
Tier names and score cutoffs vary by lender; this is the common shape, not a specific lender's sheet.
A standard rate is not a special offer, so it usually leaves the manufacturer's rebates and bonus cash in place. That matters: when a factory program makes you choose between a low APR and a rebate, the standard rate is the one you pair with the rebate. Here is how to decide which is worth more.
When a dealership quotes from its captive lender's standard sheet, the vehicle page shows an estimated APR based on the captive standard rate, including any dealer participation, next to any incentivized rate and the market-based estimate built on Rateous, so you can compare all three.
Sometimes. It depends on your credit, the term, and the market that month. That is why The Model Black shows the captive standard rate next to the market-based estimate built on Rateous on the same car, each including any dealer participation.
Usually. Rebates and bonus cash generally stack with the standard rate; it is the special incentivized rates that sometimes require giving them up.
The lender carries more risk over more months, so it charges more for the time.