For many Americans, buying a new or used vehicle often requires the help of an auto loan. 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. In 2023, 79.7% of Americans who bought new vehicles borrowed money, while only 38.4% did so when buying used cars.
Finding the best auto loan rates and lenders can help you save money and ensure that your monthly payment fits your budget. Whether you’re looking for a new car loan, a used car loan, a lease buyout loan, or a refinance loan, it’s important to do your research and compare different options. In this article, we’ll explore some of the best auto loan rates and lenders for 2024.
The Best Auto Loan Rates and Companies Compared 2024
Here are some of the top auto loan rates and lenders to consider:
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Bank of America Auto Loan: Bank of America offers auto loans for new cars, used cars, lease buyouts, and refinances. Their online application process is quick, and you can get a decision in about 60 seconds. Keep in mind that rate discounts are only available to existing banking customers with select accounts.
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Consumers Credit Union Auto Loan: Consumers Credit Union offers auto loans on both new and used vehicle purchases. They have flexible repayment terms of up to 96 months, making it easier for you to find a loan that fits your needs. Their credit-building program, Credit Smart, can be a great option for borrowers with fair or lower credit scores.
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PenFed Auto Loan: PenFed Credit Union provides auto loans for new and used vehicle purchases, as well as refinancing options. With repayment terms of up to 84 months and competitive interest rates, PenFed offers a variety of loan options to meet your needs.
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LightStream Auto Loan: LightStream offers auto loans for new and used vehicles, private party purchases, lease buyouts, and even loans for recreational vehicles or motorcycles. They provide same-day funding and repayment terms as long as 144 months. However, keep in mind that their maximum APR is 25.99%.
Remember to compare rates, loan amounts, repayment terms, and any additional fees before making a decision. It’s also important to consider your own credit score and financial situation when choosing a lender.
More Auto Loan Rates
In addition to the lenders mentioned above, there are many other options available for auto loans. Some popular choices include PNC, Capital One Auto Navigator, Alliant Credit Union, and USAA. Each lender has its own unique features and offerings, so it’s worth exploring all your options.
Our Recommendations for Best Auto Loan Rates and Companies
Considering the factors mentioned above, here are our recommendations for the best auto loan rates and companies:
PenFed
PenFed Credit Union offers auto loans on new and used vehicle purchases, as well as refinancing options. Their application process is quick and easy, and you can prequalify in just a few minutes online. With competitive interest rates and repayment terms of up to 84 months, PenFed is a reliable choice for your auto loan needs.
Bank of America
Bank of America is one of the largest national bank brands and offers auto loans for new cars, used cars, lease buyouts, and refinances. Their online application process is convenient, and you can get a decision in about 60 seconds. Keep in mind that rate discounts may only be available to existing banking customers with select accounts.
LightStream
LightStream provides auto loans for new and used vehicles, lease buyouts, and even loans for recreational vehicles or motorcycles. Their same-day funding and repayment terms of up to 144 months make them a flexible option for borrowers. However, be aware that their maximum APR is 25.99%.
Consumers Credit Union
Consumers Credit Union offers auto loans on both new and used vehicle purchases, with repayment terms of up to 96 months. They also provide a credit-building program called Credit Smart, which can be beneficial for borrowers with fair or lower credit scores. Although the online application process may not result in an instant decision, Consumers Credit Union is still a great choice for your auto loan needs.
PNC
PNC Bank offers auto loans for new and used vehicles, lease buyouts, and refinances. They provide an online application process and same-day approval for loans up to $75,000. With good credit or better, you can easily apply and get a loan decision.
Capital One Auto Navigator
Capital One’s Auto Navigator platform offers a wide range of loan options for new and used vehicles. They partner with multiple lenders to provide you with competitive rates and terms. Keep in mind that Capital One Auto loans are not available in all states and cannot be used to purchase from private sellers, auto brokers, or non-participating lenders.
Alliant
Alliant Credit Union offers auto loans for new and used vehicles, as well as refinances. With repayment terms ranging from 12 to 84 months and online pre-approval available, Alliant is a convenient option for your auto loan needs. However, you will need to be a member of the credit union to apply for a loan.
USAA
USAA offers competitive auto loans for new and used vehicles, with loan amounts ranging from $5,000 to $500,000. Their repayment terms can range from 12 to 84 months, making it easier for you to find a loan that fits your budget. However, keep in mind that USAA loans are only available to USAA members.
Methodology
To determine the best auto loan rates and lenders, we considered a variety of factors. These factors included each lender’s product options, availability, interest rates, discounts offered, vehicle types and loan amounts accepted, application process, approval criteria, and credit requirements.
4 Types of Auto Loans
There are four different types of auto loans you might be shopping for, depending on your financial and vehicle situation:
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New car loan: Used to finance the purchase of a brand-new, never-titled vehicle. New car loans often come with lower interest rates but may have stricter eligibility requirements.
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Used car loan: Used to finance the purchase of a vehicle that has already been titled to another person or business. Used car loans may have special requirements regarding the vehicle’s age, mileage, title, and condition.
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Lease buyout loan: Used to fund the purchase of a leased vehicle when you decide to keep the car. Lease buyout loans can be tricky as the vehicle’s value may not align with its purchase price, affecting loan eligibility.
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Refinance loan: Used to pay off an existing auto loan and replace it with a new loan, which may have different repayment terms, monthly payment amount, interest rate, and even borrower(s). Refinance loans are only offered by certain lenders and may have specific criteria regarding the vehicle’s age, mileage, features, and condition.
How to Select the Best Auto Loan Lender
When selecting the best auto loan lender for your needs, consider the following:
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Shop around for the lowest rate: Getting the lowest interest rate is key to saving money over the course of your loan. Apply or get pre-approved with multiple lenders to compare rates and see which one offers the best deal. You can also take your pre-approval offers to a dealership and negotiate for a better rate.
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See who offers the best package: While the interest rate is important, consider other factors such as repayment term, monthly payment amount, prepayment penalties, and potential loan fees. Look at the big picture to find the best overall loan package.
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Rate-shop without affecting your credit: To avoid multiple hard inquiries on your credit report, only apply with lenders that offer soft credit check pre-approvals. Additionally, apply with all potential lenders within a short period of time to ensure that they are treated as a single inquiry.
What to Know Before Applying for an Auto Loan
Before applying for an auto loan, keep the following points in mind:
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Rates vary for new and used cars: Lenders often offer different interest rates for new and used cars. New cars generally have lower rates, but the overall purchase amount may be higher.
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Rates vary based on car age: Some lenders have tiered rates based on the age of the car. Generally, newer used vehicles have lower interest rates.
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Rates vary based on loan term: Longer loan terms may result in higher interest rates as lenders aim to mitigate risk. Shorter loan terms typically come with lower rates.
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Your credit history matters: Your credit score plays a crucial role in loan approval, terms, and rates. A higher credit score generally leads to better loan terms and lower interest rates.
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Down payment may be required: Most lenders require a down payment to show your commitment and reduce the loan amount. The requirement varies depending on the lender, vehicle, and loan-to-value ratio.
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Cosigner may be necessary: If you have a low credit score or limited credit history, adding a creditworthy cosigner can improve your chances of approval and secure better loan terms.
Compare Offers for the Best Auto Loan Rates and Terms
An auto loan is an essential part of buying a new or used vehicle for most drivers. Finding the best auto loan rates and lenders not only allows you to purchase the car you want but also helps you save money on interest and manage your monthly payments. Take the time to compare offers, rates, and terms to ensure you make the best decision for your financial situation.
Frequently Asked Questions (FAQs)
Q: What are the pros and cons of auto loans?
Auto loans allow you to finance a vehicle purchase without paying the full amount upfront. However, they can be costly due to interest rates. It’s important to consider the pros and cons before taking out an auto loan.
Q: How do I apply for a car loan?
To apply for a car loan, you’ll need to provide personal information, contact details, and an idea of the loan amount you want. Some lenders require specific vehicle details, while others allow you to apply without a specific vehicle in mind. Be prepared to provide your Social Security number and consent to a credit inquiry.
Q: What is a good interest rate for a car loan?
Interest rates for car loans vary depending on factors such as your credit score and the type of vehicle you’re financing. Generally, a single-digit interest rate is considered good.
Q: Bank loan vs. dealership loan: Which is better?
Both bank loans and dealership loans have their advantages. Bank loans can be preapproved and offer competitive rates, while dealership loans may match or beat preapproved offers. The better choice depends on the rates and terms offered.
Q: Buying vs. leasing a car: Which is better?
Buying a car allows you to own it and have more control over its use and sale. Leasing a car allows you to have lower upfront costs and potentially lower monthly payments. The better choice depends on your individual needs and financial situation.