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Best Auto Loan Rates & Lenders for May 2024

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Updated May 7, 2024

For many Americans buying a new or used vehicle often requires the help of an auto loan (in 2023, 79.7% borrowed when buying new but only 38.4% did when buying used). Financing a vehicle purchase with an auto loan allows you to buy the car you want today and repay that debt over a period of years at a specific interest rate. Once you have an auto loan, you may want to refinance that loan if interest rates go down—or if your credit score rises, qualifying you for better financing.

Finding the best auto loan rates and lenders can help you save money and ensure that your monthly payment requirement matches your budget. Some lenders offer all options; others may only handle refinancing. Here’s how to manage your search.

The best auto loan rates and companies compared

TitleLoan amountTermMin. credit score
Consumers Credit Union Auto Loan
$1,000 to $100,000
Up to 96 months
No minimum if you complete Credit Smart program
PenFed Auto Loan
Up to $150,000
36, 48, 60, 72, or 84 months
N/A
Bank of America Auto Loan
No maximum
48, 60, or 72 months
N/A
LightStream Auto Loan
$5,000 to $100,000
24 to 144 months
Good to excellent
PNC Auto Loan
$7,500 to $75,000+
12 to 72 months
N/A
Capital One Auto Finance
Below $100,000
36 to 72 months
N/A
Alliant Auto Loan
$4,000 to $1,000,000
12 to 84 months
N/A
USAA Auto Loan
$5,000 to $500,000
12 to 84 months
N/A

More auto loan rates

Our recommendations for best auto loan rates and companies

Consumers Credit Union

Consumers Credit Union

Consumers Credit Union Auto Loan

Consumers Credit Union Auto Loan

Loan amount
$1,000 to $100,000
Term
Up to 96 months
Min. credit score
No minimum if you complete Credit Smart program

Pros:

  • Guaranteed auto loans to bad credit borrowers.
  • Terms up to 96 months.
  • No predetermined loan maximum.

Cons:

  • Must become a member to qualify.
  • Bad credit borrowing program isn’t immediate.
  • No instant credit or rate decision.

Once you become a member, Consumers Credit Union offers auto loans on both new and used vehicle purchases for cars up to seven years old. There are many repayment terms to choose from, going up to 96 months in length. And while you can apply for funding online, you won’t get an instant decision.

Consumers Credit Union may be a good choice for borrowers with “fair” or lower credit scores (or even no credit), thanks to its Credit Smart secured auto loan program. This provides members with a guaranteed new or used auto loan after the completion of the eight-month credit-building program.

Penfed

PenFed

PenFed Auto Loan

PenFed Auto Loan

Loan amount
Up to $150,000
Term
36, 48, 60, 72, or 84 months
Min. credit score
N/A

Pros:

  • Competitive rates on new, used, and refinance auto loans.
  • Online preapproval in just minutes.
  • Allowed LTV up to 125%.

Cons:

  • Must become a member to qualify.
  • Vehicle must have less than 125,000 miles.
  • Refinancing not allowed on existing PenFed auto loans.

PenFed Credit Union offers auto loans on new and used vehicle purchases, as well as refinancing of your current auto loan (excluding existing PenFed loans). You can prequalify for a PenFed loan in just a few minutes online with no impact to your credit, and competitive interest rates are available on loans with repayment terms up to 84 months. Vehicle purchase loans are offered to members on cars with less than 125,000 miles and up to a 125% LTV ratio.

Bank of America

Bank of America

Bank of America Auto Loan

Bank of America Auto Loan

Loan amount
No maximum
Term
48, 60, or 72 months
Min. credit score
N/A

Pros:

  • New, used, refinance, or lease buyout loan options.
  • Online application and instant decision.
  • Competitive rates with many discount options.

Cons:

  • Discounts are limited to Preferred Rewards members.
  • No prequalification or preapproval offered.
  • Minimum loan amount of $7,500 ($8,000 in Minnesota).

One of the largest national bank brands, Bank of America offers auto loans for new cars, used cars, lease buyouts, and refinances. Loans are available in all 50 states at competitive interest rates and can even be used to purchase a vehicle from a private seller. You can use Bank of America’s online application to get a decision in about 60 seconds.

Though rate discounts are available, they’re only offered to existing banking customers with select accounts. You also aren’t able to get preapproved, so in order to see your offered terms and rates, you’ll need to formally apply and take a hard inquiry on your credit report.

LightStream

LightStream

LightStream Auto Loan

LightStream Auto Loan

Loan amount
$5,000 to $100,000
Term
24 to 144 months
Min. credit score
Good to excellent

Pros:

  • Borrow up to $100,000
  • Loan repayment terms as long as 144 months
  • No age or mileage restrictions

Cons:

  • No pre-approval option
  • Interest rates can be high for some borrowers
  • Only available to good or excellent credit borrowers

LightStream offers auto loans for new and used vehicles, private party purchases, classic cars, auto loan refinances, auto lease buyout, and even loans for recreational vehicles or motorcycles. Borrowers can request from $5,000 to $100,000 with same-day funding, and repayment terms as long as 144 months. There are no vehicle

The maximum APR on an auto loan through LightStream is 25.99%, which may be higher than many other lenders. You also can’t get pre-approved online without affecting your credit score, which will need to be good or excellent in order to qualify.

PNC

PNC

PNC Auto Loan

PNC Auto Loan

Loan amount
$7,500 to $75,000+
Term
12 to 72 months
Min. credit score
N/A

Pros:

  • Dealer, private party, lease buyout, and refinance loans offered.
  • Autopay discount available to PNC checking customers.
  • Co-applicants allowed.

Cons:

  • Good credit required.
  • Check Ready check only valid for 30 days.
  • No online pre-approval option.

PNC Bank offers auto loans for new and used vehicles (model year 2015 or newer with no more than 80,000 — or in some cases, 100,000 — miles) purchased through a dealer or private party. They also offer loans for lease buyouts and auto loan refinancing, and borrowers can choose to apply with a co-borrower.

As long as you’re borrowing $75,000 or less, the entire process can be completed online and, if buying through an authorized dealer, you’ll be given a paper check that you can use for up to 30 days to make your purchase.

PNC Bank auto loans are only available to borrowers with good credit or better, and there is no option to get pre-approved for a loan online without affecting your credit.

Capital One Auto Navigator

Capital One

Capital One Auto Finance

Capital One Auto Finance

Loan amount
Below $100,000
Term
36 to 72 months
Min. credit score
N/A

Pros:

  • Build a personalized loan before visiting the dealership.
  • Prequalify online without affecting your credit.
  • Shop for vehicles and a loan in the same place.

Cons:

  • Only vehicles for sale through dealer partners are allowed.
  • Your best options may actually be other lenders.
  • Not available in all states.

You can shop for an auto loan and your next vehicle through Capital One’s Auto Navigator platform. This platform lets you get pre-approved for loans on new and used vehicles available through dealer partners. Used vehicle loans are allowed on cars as old as 10 years and with up to 120,000 miles, as long as they are being sold by a participating dealer. You can also apply to refinance an auto loan through Capital One.

Capital One Auto Navigator not only provides you with loan options from Capital One, but also from partner lenders. So the best option for you may actually come from a lender other than Capital One. Loans aren’t available in all states, and borrowers in Hawaii and Alaska will need to shop elsewhere. You won’t be able to use a Capital One auto loan to purchase from a private seller, auto broker, or non-participating lender, either.

Alliant

Alliant

Alliant Auto Loan

Alliant Auto Loan

Loan amount
$4,000 to $1,000,000
Term
12 to 84 months
Min. credit score
N/A

Pros:

  • Online pre-approval.
  • Borrow up to $1 million.
  • New and used car purchase or refinance loans available.

Cons:

  • Only available to members.
  • No lease buyouts.
  • Funds take two business days to arrive.

Alliant Credit Union offers auto loans of up to $1 million for new and used vehicles as well as refinance loans. Repayment terms can range from 12 to 84 months and online pre-approval is available.

You’ll need to be a member of the credit union to apply for an auto loan. While approval is usually done the same day, funds are sent via FedEx two-business shipping unless you want to pay for overnight postage. Alliant also does not offer lease buyouts, but does have a partner lender (Lease Maturity) through which you can apply.

USAA

USAA

USAA Auto Loan

USAA Auto Loan

Loan amount
$5,000 to $500,000
Term
12 to 84 months
Min. credit score
N/A

Pros:

  • Competitive interest rates.
  • Autopay discounts available.
  • Private party purchases allowed.

Cons:

  • Only available to eligible members.
  • No online pre-approval.
  • High loan minimums for certain repayment terms.

Competitive auto loans through USAA are available for new and used vehicles from $5,000 to $500,000, whether you buy from a dealer or even a private party. Loan repayment terms can range from 12 to 84 months, though longer terms require a higher minimum loan amount.

USAA does not offer loan pre-approval, so you’ll have to incur a hard inquiry in order to shop rates and see your loan options. These loans are also only available to USAA members; if you’re eligible for membership with USAA, though (by being an active-duty or retired military service member, spouse, child, or even grandchild), this may be a worthwhile option for your next auto loan.

Methodology

In order to determine the best auto loan rates and lenders, we looked at a number of important factors. These included each lender’s product options and availability, as well as the interest rates and any discounts offered. We also considered the types of vehicles and loan amounts that each lender accepts, how easy the application and approval process is, and what sort of income and credit requirements borrowers will need to meet.

4 types of auto loans

There are four different types of auto loans you might be shopping for, depending on your existing financial and vehicle situation. These include:

  • New car loan. A new car loan is used to finance the purchase of a brand-new, never-titled vehicle. These loans may have stricter eligibility requirements but often come with lower interest rates than used car loans. New vehicles are typically purchased from a dealership or directly from the manufacturer.
  • Used car loan. A used car loan is designed to help finance the purchase of a vehicle that is new to you but has already been titled to another person or business. These loans may have special requirements regarding the vehicle’s age, mileage, title, and condition.
  • Lease buyout loan. If you are leasing a vehicle from a dealership and want to keep the car, a lease buyout loan can be used to fund the purchase. These can be a bit tricky, as the lease buyout price is usually predetermined at the start of the contract, but the vehicle may not be worth its purchase price at lease end. This can increase your LTV ratio and make your purchase ineligible for many auto loans.
  • Refinance loan. A refinance loan is used to pay off the debt from an existing auto loan, replacing it with a new loan that has its own repayment terms, monthly payment amount, interest rate, and sometimes even borrower(s). Refinance loans are only offered by certain lenders and may have strict criteria regarding the vehicle’s age, mileage, features, and condition.

How to select the best auto loan lender

Not sure which auto lender is the best for you and your next auto loan? Here are three ways to guide your search.

1. Shop around for the lowest rate

The lower your interest rate, the less you’ll pay in finance charges over the course of your loan. This means your car will cost you less in the end. Finding the best possible annual percentage rate (APR) is always in your best interests.

To locate the best rate you’ll likely need to apply—or at least get preapproved—through multiple lenders first. Lending platforms can be great for this, as you’ll only enter your information once to get offers from various lenders. You can also take your preapproval offers with you to a dealership and allow its finance department to try to match or beat your current rate.

2. See who offers the best package

While rate is important, so are the other elements of the deal you’re offered. It’s important to look at the whole package when picking the best auto loan for you. Pay attention to your repayment term (how many months you have to repay the debt), monthly payment amount, prepayment penalty (if one exists), and any loan fees you may incur.

3. Rate-shop without affecting your credit

Rate-shopping with multiple lenders is important, but you should do it in a way that doesn’t ding your credit score more than necessary. There are two ways to accomplish this.

  1. Only rate-shop with lenders that offer soft credit check preapprovals. You won’t incur a hard inquiry until you choose a lender and proceed with your loan.
  2. Apply with all of your potential lenders within a short period of time. Most popular credit-scoring models allow for rate shopping within a specific window, which may range from 14 to 45 days. As long as all of your related loan applications are initiated within that window, they will only count against your calculated score as one single inquiry.

What to know before applying for an auto loan

Thinking about applying for a new auto loan? Here are a few things to keep in mind.

Your rates will vary depending on whether your car is new or used

Many lenders will offer different interest rates for new cars versus used cars. In general you’ll get a lower rate when buying a new car than when buying a used one. The overall purchase amount on the new car is likely to be higher, though.

Your rates will vary depending on the age of your car

Some lenders will not only charge a higher rate for used cars; they will also tier those rates based on how old the car is. You may also see lenders with different repayment term options, depending on the vehicle’s age. This is so you won’t still be paying off a vehicle when it’s too old and becomes a bigger risk for the lender. In general, the newer your used vehicle, the lower the interest rate.

Your rates will vary depending on the loan term you choose

Lenders are all about mitigating risk, so the longer you need to stretch out your loan repayment, the higher your rate may be. A 36-month loan will often have a lower interest rate than an 84-month loan for the same vehicle.

Your credit history is very important

As with most loans, your credit history and current score are key factors in determining not only your loan approval but also your terms and rates. The lower your score, the higher your APR will generally be. With poor credit or no credit, you may even be denied a loan.

You may need a down payment

Most lenders will require you to have some skin in the game, usually in the form of a down payment. Your down payment requirement will depend on the lender and the vehicle you choose, as well as the car’s LTV ratio. The more the car is worth compared with your purchase price, the less you may need to put down. However, if there isn’t much equity, or there is negative equity (meaning that the car is worth less than what you’re paying for it), your down payment requirement may be higher.

You may need a cosigner

Depending on your age, credit score, and credit history (or lack thereof), you might need to add a creditworthy cosigner to your loan. This can not only help you get approved; it can also unlock better rates and loan terms.

TIME Stamp: Compare offers for the best rates and terms on an auto loan

For the majority of drivers today, an auto loan is a necessary part of buying a new or used vehicle. Finding the best auto loan rates and lenders can not only put you behind the wheel of the car you want; it also ensures that you pay the least amount of interest possible and are able to afford your monthly payments for the duration of the loan term.

Frequently asked questions (FAQs)

What are the pros and cons of auto loans?

Auto loans are a great way to fund a new or used vehicle purchase, allowing borrowers to buy the vehicle they need without paying entirely up front or depleting savings. Because these loans are secured, the vehicle title is held as collateral until the debt is repaid, and the lender technically owns your car in the meantime. They can also be costly, depending on the interest rate you’re offered.

How do I apply for a car loan?

In order to apply for a car loan, you’ll need to provide a lender with your personal information, contact info, and a general idea of how much you want to borrow. Some lenders will let you apply without having a specific vehicle in mind, while others may want the vehicle identification number (VIN) and other details first. You may also need to provide the lender with your Social Security number and agree to a hard credit inquiry as part of the application process.

What is a good interest rate for a car loan?

Rates fluctuate all the time, but as of June 2023, according to research conducted by Experian, the average interest rate for a new car for people with a credit score of 601 to 660 was 8.86%, while the average rate for a used car was 13.28%. For people with the best credit scores (781 to 850), the average scores were 5.18% and 6.79%, respectively. Your own rate will vary depending on the vehicle you buy, the lender, and your own credit history, but a single-digit rate is generally considered good.

Bank loan vs. dealership loan: Which is better?

Bank loans can be preapproved before you ever set foot on a dealer’s lot and may be your best option to find low interest rates and competitive loan terms before shopping for a vehicle. Dealership loans may be offered in-house or through many of the same banks and financial institutions, so dealerships can sometimes match or even beat any preapproved offers you have. Ultimately, the better loan is the one with the best rate and term.

Buying vs. leasing a car: Which is better?

When you buy a car, you own the vehicle outright; are responsible for everything connected to it, such as the costs of a loan, repairs, insurance, etc.; and can choose to sell it whenever you want.

When you lease a car, you are in effect renting it from a dealership. You have use of it for the length of the lease but still, as with owning it, you are responsible for the car’s maintenance costs, insurance costs, etc. during that period. What you cannot do is sell it and take the money for yourself. However, at the end of the lease, instead of giving the car back to the dealership, you may be able to purchase it at a price that takes into account at least some of what you spent leasing it.

As to which is better, the answer is that it depends on the deal. Leasing a car allows you to have the use of one while spending less up-front money than it takes to buy one and perhaps paying less monthly than you would do paying off a car loan. However, in the long run you may end up spending more on the lease than you would have if you had purchased the car and subsequently sold it or traded it in for a new one.

The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.

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