Check out low APRs for new car loans, and the best used car loan rates.
| Auto loans | APR as low as... |
|---|---|
| Source: Bankrate and Interest.com as of June 12, 2019. Rates vary depending on credit score and loan term. | |
| 48 months new | 4.71% |
| 60 months new | 4.77% |
| 36 month used | 5.26% |
| Credit Score | Average APR New Car | Average APR Used Car |
|---|---|---|
| Source: Experian: State of the Automotive Finance Market Q4 2018. | ||
| 781-850 | 4.19% | 4.69% |
| 661-780 | 5.01% | 6.38% |
| 601-660 | 7.91% | 10.91% |
| 501-600 | 12.17% | 16.78% |
With auto loan options for every type of deal you can imagine -- including new cars, used cars from a dealer or private seller, lease buyouts and even classic car financing -- LightStream, a division of SunTrust Bank, is a great option for those with good to excellent credit.
According to Experian, the average car loan is just under $32,000, with most people choosing a 60- or 72-month auto loan term. To finance that amount, and with those terms, LightStream currently has APRs between 4.94 percent and 6.74 percent for a new car loan with a 0.50% discount for borrowers on AutoPay. LightStream is also able to fund your loan the same day you apply (pending approval). It offers loan amounts from $5,000 to $100,000, and even has a Rate Beat Program in which they will be beat a competitive APR (depending on certain terms and conditions) by 0.10 percent.
The differences between Bank of America and Capital One are subtle, and both banks provide a wealth of information online.
Bank of America will finance a minimum of $7,500 ($8,000 in Minnesota) and requires that the car be no more than 10 years old, with no more than 125,000 miles and valued at no less than $6,000. Financing is available in all 50 states and the District of Columbia. For a 60-month term, Bank of America’s APR starts at 3.39 percent for a new car and 3.59 percent for a used car.
Capital One, on the other hand, will let you borrow as little as $4,000, but requires you to purchase the car through one of their participating dealers. Their Auto Navigator site, however, lets you search for inventory in your area and gives you the ability to see how different makes and models, and different features, will impact your monthly payment; this will give you a lot of information before you head to the dealer. Also, the quick pre-qualification is through a soft inquiry so your credit score won’t be impacted.
Carvana is a great option for those who want to shop for their new car entirely online from home and those with poor credit. Carvana’s only requirements are that you are at least 18 years old, make $10,000 in yearly income, and have no active bankruptcies. When you pre-qualify, Carvana does not make a hard inquiry on your credit, so your credit score won’t be impacted; a hard inquiry is only made once you place an order.
After you are prequalified, you have 45 days to make a purchase from Carvana inventory and either pick up the car, have it delivered to you, or fly to the car and then drive it back. Currently there are just over 11,000 cars in their inventory.
If you want to compare multiple loan offers, but don’t want to spend a lot of time doing it, MyAutoLoan.com is a great option.
After filling out a single, online loan application, you’ll be given four quotes from different lenders. To qualify, you must be at least 18 years old, have an annual income of $21,600, a FICO score of 500 or greater, and be purchasing a car with less than 125,000 miles and that is 10 years old or newer. By comparing multiple auto loan offers at once, you can pick the one with the best interest rate, loan term and conditions that work for you and your budget without having to shop around.
Unless you have saved enough money to buy a car outright, you will need to finance your new or used vehicle purchase through an auto loan. Most consumers will make a down payment on the car, or apply the trade-in value of their existing car, and then finance the balance with a car loan. You will then make monthly payments to the lender until your car is paid in full.
Auto loan terms can vary from 24 to 72 months. With a shorter term loan, you will have a lower interest rate, but you will also face higher monthly payments. Several factors will determine your auto loan rate, including credit score, loan term, location, and car value and mileage. If you calculate the monthly payment that fits your budget before you go shopping, you will be better equipped to make an informed decision about the car you can afford.
While a longer term car loan with a lower monthly payment may make the most sense for your budget, be aware that it will take longer for you to build equity in your car. This means that if you decide to trade in the car early, or if you get into an accident and need to purchase a new car, your car value may be less than the money you’ve already paid toward it. The other downside of longer term auto loans is that you will end up paying more because of the higher APR.
Car dealers usually offer financing through their preferred lenders, but that’s not your only option for an auto loan. Getting pre-approved directly with a lender helps you to negotiate the best auto loan rate before you even get to the lot and will probably save you money in the long run.
Salesmen like to focus on the monthly payment, which makes it easier to forget about the actual price of the car. But when you show up with a pre-approved auto loan in-hand, the only thing left to discuss is the price of the car. Some dealers might even try to beat the best auto loan rate you got elsewhere, giving you the option to choose the best offer.
Whether you’re applying with an online lender, credit union or bank for your car loan, the application process is simple and should only take about 20 minutes online. Just make sure you have the following information on-hand:
This information helps lenders get a clear picture of your financial status and will make it easier for you to secure the best auto loan rate.
If you know how much you need to borrow for your new or used car loan (based on the price of the car less the amount of your down payment or trade-in value), you can use Bankrate’s Auto Loan Calculator to see how APRs and loan terms will impact your monthly car payment.