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Best auto loan interest rates in February 2023

As of February 07, 2023
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Before arriving at a dealership, it is wise to first research vehicle financing. Auto loans are secured loans that help borrowers pay for a new or used car. They are available from dealerships and lenders, so it is important to shop around to find the best interest rates and terms for your vehicle.

Bankrate's best auto loans are selected based on a lender's available rates and terms, customer experience and transparency. Lender highlights are outlined below to help you to determine which vehicle financing option is right for you.

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4.0

Bankrate Score

  • Pre-qualify for an auto loan in minutes with no impact to your credit score
  • See your personalized rate and monthly payment while searching millions of cars
  • Adjust things like down payment, term length and more to build the deal that fits your finances best
  • Know your financing options before visiting the dealer

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3.7

Bankrate Score

  • Rates as low as 0% on select cars, trucks and SUVs
  • Free Online Quotes - Get Your CarsDirect Target Price Today
  • Local dealers compete to provide the best rates for both new and used vehicles

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3.9

Bankrate Score
APR from

2.83- 36.00%

Term

24-60mo

Min credit

700

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4.2

Bankrate Score
APR from

5.99- 13.74%

with AutoPay
Term

24-84mo

Min credit

750

Apply on partner site

4.2

Bankrate Score
APR from

2.99%

Term

36-60mo

Min credit

700

Apply on partner site

  • Get approved in 2 minutes or less for credit lines up to $200,000.
  • Apply once, even if you aren't ready to purchase for up to 24 months
  • Use Flexline™ to buy new or used vehicles, buyout leases or refinance loans.
  • No impact to credit for pre-approval. One hard credit pull to access line of credit for life*
  • *Lifetime access with rotating balance, lifetime access expires with 24 months of inactivity

w/0.25% autopay discount
Apply on partner site

3.5

Bankrate Score
APR from

5.24%

Term

48-60mo

Min credit

700

Apply on partner site

3.9

Bankrate Score
APR from

4.49%

Term

60mo

Min credit

700

Apply on partner site

  • Get approved in 2 minutes or less for credit lines up to $200,000.
  • Apply once, even if you aren't ready to purchase for up to 24 months
  • Use Flexline™ to buy new or used vehicles, buyout leases or refinance loans.
  • No impact to credit for pre-approval. One hard credit pull to access line of credit for life*
  • *Lifetime access with rotating balance, lifetime access expires with 24 months of inactivity

w/0.25% autopay discount
Apply on partner site
APR from

5.04- 14.99%

Term

24-84mo

Min credit

600

4.2

Bankrate Score
APR from

2.99%

Term

36-60mo

Min credit

700

Apply on partner site
APR from

3.99- 24.99%

Term

60mo

Min credit

700

Apply on partner site

3.8

Bankrate Score
APR from

7.29- 11.54%

Term

36-72mo

Min credit

700

Apply on partner site

3.9

Bankrate Score
APR from

3.12%

Term

48-60mo

Min credit

700

Apply on partner site

4.1

Bankrate Score
APR from

5.61- 29.99%

Term

24-84mo

Min credit

700

Apply on partner site

4.2

Bankrate Score
APR from

6.49- 14.24%

with AutoPay
Term

24-84mo

Min credit

700

Apply on partner site

4.2

Bankrate Score
APR from

5.99- 13.74%

with AutoPay
Term

24-84mo

Min credit

700

Apply on partner site

3.2

Bankrate Score
APR from

2.49%

Term

60mo

Min credit

700

Apply on partner site

4.2

Bankrate Score
APR from

2.99%

Term

36-60mo

Min credit

700

Apply on partner site

  • Get approved in 2 minutes or less for credit lines up to $200,000.
  • Apply once, even if you aren't ready to purchase for up to 24 months
  • Use Flexline™ to buy new or used vehicles, buyout leases or refinance loans.
  • No impact to credit for pre-approval. One hard credit pull to access line of credit for life*
  • *Lifetime access with rotating balance, lifetime access expires with 24 months of inactivity

w/0.25% autopay discount
Apply on partner site

What are car loans and how do they work?

Auto loans let you borrow the money you need to purchase a car. Since car loans are typically "secured", they require you to use the automobile you are buying as collateral for the loan. You are typically asked to pay a fixed interest rate and monthly payment for 24 to 84 months, at which point your car will be paid off. Many dealerships offer their own financing, but you can also find auto loans at national banks, local credit unions and online lenders. 

When shopping for an auto loan, compare APRs across multiple lenders to make sure you are getting a competitive rate. Look for lenders that keep fees to a minimum and offer repayment terms that fit your needs. 

Loan details presented here are current as of Feb. 7, 2023. Check the lenders’ websites for more current information. The auto loan lenders listed here are selected based on factors such as APR, loan amounts, fees, credit requirements and more. 

As of Feb. 1, 2023, the average APRs according to a Bankrate study are the following.

36-month term 48-month term 60-month term
New car 6.14% 6.16% 6.19%
Used car 6.49% 6.83% 7.89%

Types of auto loans

Car loan options go beyond just new and used. Each auto loan type has specific uses that cater to certain types of borrowers, and knowing what type you need can make the loan shopping process easier.

Compare auto loan rates in February 2023

Caret Down
Lender Current APR Term Loan Amount Best for
LightStream 5.99%-13.74% (with autopay) 24 -84 months $5,000-$100,000 Overall auto loan
Bank of America Starting at 5.49% 48-72 months Starting at $7,500 Big bank option
Capital One Not specified 24-84 months Starting at $4,000 Convenience
Carvana Starting at 6.85% 12-72 months Not specified Fully online experience
myAutoLoan Starting at 3.69% 24-84 months $5,000-$100,000 Shopping for multiple loan offers
Upstart 5.61%-29.99% 24-84 months $9,000-$60,000 Fair credit
Lender Current APR Term Loan Amount
Capital One Not specified 24 to 84 months Starting at $4,000
Autopay Starting at 2.99% 24 to 96 months $2,500 to $100,000
Carvana Starting at 6.85% 12 to 72 months Not specified
iLending Starting at 2.14% 12 to 84 months Starting at $7,500
For more information on bad credit auto loan rates, check out our page on bad credit auto loans.
Lender Current APR Term Loan Amount
Lightstream 6.49% to 14.24% (with autopay) 24 to 84 months $5,000 to $10,000
Autopay Starting at 3.24% 24 to 96 months $2,500 to $100,000
Caribou 2.83% to 36.00% 24 to 60 months Not specified
Upstart 5.61% to 29.99% 24 to 84 months $9,000 to $60,000
RefiJet 5.24% to 12.29% 48 to 60 months Not specified
For more information on auto loan refinance rates, check out our page on auto loan refinancing.

Best auto loan lenders in 2023

Best overall

Min. credit score:
700
Fixed APR From:
5.99% –13.74%
Loan amount:
$5,000– $100,000
Term lengths:
2 to 7 years
Min. annual income:
Not disclosed
Overview: LightStream offers unsecured auto loans for drivers online. It covers a range of financing needs including loans for new cars, used cars from a dealer or private seller, lease buyouts and even classic car financing.
Why Lightstream is the best overall: Lightstream offers quick funding for drivers in a pinch and a wide range of loan amounts. 

Best big bank option

Min. credit score:
Not disclosed
Fixed APR From:
4.79%
Loan amount:
$7,500
Term lengths:
4 to 6 years
Min. annual income:
Not disclosed
Overview: Bank of America offers flexible and convenient auto loans you can apply for directly on its website. Rates are competitive, and you can qualify for additional discounts if you are an eligible Bank of America customer.
Why Bank of America is the best big bank option: With over 4,000 brick-and-mortar locations, Bank of America is perfect for an in-person experience coupled with discounts for account holders. 

Best for convenience

Min. credit score:
300
Fixed APR From:
Not disclosed
Loan amount:
$5,000– $200,000
Term lengths:
2 to 7 years
Min. annual income:
Not disclosed
Overview: Capital One's financing works as a “one-stop shop” for your auto loan and vehicle purchase. Through one of its partnered dealerships, you can borrow as little as $4,000 with terms from 24 to 84 months.
Why Capital One is the best for convenience: The Capital One Auto Navigator site lets you search for inventory in your area and gives you the ability to see how different makes, models and features will affect your total cost. 

Best fully online experience

Min. credit score:
Not disclosed
Fixed APR From:
6.85%
Loan amount:
Not specified
Term lengths:
3 to 6 years
Min. annual income:
Not disclosed
Overview: ​​Carvana lets you shop for a car online and pick up your purchase from a giant “car vending machine” or choose from its other delivery options. Its process lets you enjoy a unique experience, and Carvana also offers competitive car loan rates and terms.
Why Carvana is the best fully online experience: Carvana offers a streamlined online experience where you can shop for and finance your new vehicle all from the comfort of your own home.

Best for shopping for multiple loan offers

Min. credit score:
575
Fixed APR From:
2.69%
Loan amount:
$5,000– $8,000
Term lengths:
2 to 6 years
Min. annual income:
Not disclosed
Overview: With no application fee and convenient online application myAutoLoan works with an expansive network of lenders to enable you to compare offers and find the right lender for your needs. It also offers loans for refinancing and lease buyouts. 
Why myAutoLoan is the best for shopping for multiple loan offers: You can easily compare multiple loan offers all on the myAutoLoan platform with no hard credit pull. This platform lets you enter your information once and receive multiple loan offers in one place.

Best for fair credit

Min. credit score:
300
Fixed APR From:
5.61% –29.99%
Loan amount:
$9,000– $60,000
Term lengths:
2 to 7 years
Min. annual income:
Not disclosed
Overview: Upstart is an online lender that utilizes the intelligence of AI technology to cater to drivers looking to refinance their car loans. It factors a driver's work and education history for its loans that can be refinanced up to $60,000. 

Why Upstart is best for fair credit: Drivers with fair credit scores, 510 to 669, may not receive competitive rates from traditional lenders. But Upstart's smarter rate approach will give any driver a better chance to receive decent rates to save money. 

Pros and cons of auto loans 

While securing an auto loan can be a great way to get behind the wheel of a vehicle, it is important to weigh the advantages and disadvantages that come with financing your next ride.

Pros

  • Checkmark

    Ability to afford a car. Financing allows you to afford a dream vehicle that might be outside your cash budget.

  • Checkmark

    Can improve credit. Paying your loan on time and in full each month is one of the most effective ways to improve your credit score.

  • Checkmark

    Ends in ownership. Once you pay off your loan, the vehicle is all yours.

Cons

  • Potentially high payments. Depending on your credit history, you could be signing off on expensive monthly payments.

  • Vehicle depreciation. Some vehicles depreciate so fast, you’ll end up owing more than the vehicle’s value. This is called being upside-down on your loan.

  • Steep interest rates. Current economic factors mean higher-than-usual interest rates for many borrowers.

What to know before applying for an auto loan

When looking for a car loan, it is best to shop around with a few lenders before making your decision. Each lender has its own methodology when reviewing your application for a loan and setting your interest rate and terms.  

Generally, your credit score will have the biggest effect on the rates you're offered. The higher your credit score, the lower APR you will receive. Having a higher credit score may also allow you to take out a larger loan or access a broader selection of repayment terms, but there are still ways to finance a car with bad credit. Choosing a longer repayment term will lower your monthly payments, although you will also pay more interest overall.  

If you find a few lenders that you like, see if they offer preapproval — going through this process will let you see which rates you qualify for without affecting your credit score. 

Auto loan rates by credit score

As mentioned, lenders use credit score as the primary determinant of a potential borrower's ability to pay off a loan. So, the better your credit score is, the more competitive interest rates you will receive. Below are the average APRs for new and used vehicles in the third quarter of 2022 according to Experian.

CREDIT SCORE NEW CAR LOANS USE CAR LOANS
781-850 3.84% 3.69%
661-780 4.90% 5.47%
601-660 7.25% 9.81%
501-600 10.11% 15.86%
300-500 12.93% 19.81%

How to manage a car loan 

The key to keeping up with your car loan is sticking to a budget and understanding how your agreed-upon payment timeline impacts it. Otherwise, you can put yourself at risk of losing your vehicle and running into trouble. If you are on the brink of missing a payment, reach out to your lender as soon as possible to seek a solution. 

Also, consider how paying off your loan early can impact your credit, as it can drop your score by a few points. Not all lenders even allow early loan pay-off. Approach your auto loan pay-off with care to ensure it fits best with your financial situation.

How recent Fed hikes can impact the cost to finance a car 

The February meeting of the Federal Open Market Committee (FOMC) raised the benchmark rate to 4.5 percent to 4.75 percent, another hike working towards the goal of controlling growing inflation. For drivers already dealing with new vehicles costing an average of over $49,000 in December 2022, according to Kelley Blue Book, and the price to fill up at the pump hitting record highs, the added burden of higher rates feels daunting.  

The benchmark rate doesn’t directly shift auto rates, but it affects the number that auto lenders base their rates on. You may be met with steeper costs to borrow money for vehicle financing due to the Fed hike, but the hike itself is only one part of that increase.  

Even with higher costs across the board, there are still a few ways to prepare and save money, regardless of movements made by the central bank.  

  • Apply for preapproval. By walking into the dealership with financing in hand you garner negotiating power and come equipped with a firm understanding of how much you can afford to spend.  
  • Trade in your current vehicle. Consider trading in your current vehicle. You can save money on the vehicle down payment and don't have to hassle with selling it yourself. Depending on the state you are buying in, you may also be able to save on taxes.
  • Compare at least three different lenders. Shopping around to different lenders ensures that you are getting the best deal available. It may take time to find the right lender for your needs, so be patient.  
  • Calculate the true cost of ownership. Purchasing a vehicle is made up of more than just the price of the vehicle and monthly payments. So instead, you must do the math so that you only purchase what you can afford.  
  • Consider buying electric. Although EVs can be priced a bit higher than traditional gas vehicles, the cost over the lifetime of the loan tends to be less expensive. Along with this, there are green loans and many states offer tax credits.

FAQs about auto loans

Methodology

Bankrate considers 18 different factors when selecting top auto loans. Acceptance criteria, whether rates and fees are available and APR all influence lender scores. These scores are broken up into four categories.

  • Availability: Loan amounts, repayment options, dealership requirements and state availability all contribute to this category.
  • Affordability: This section houses APR ranges, acceptance criteria, fees and discounts. 
  • Customer experience: How long you have to shop, customer service availability, whether there’s an app and autopay availability are accounted for in this section.
  • Transparency: This category accounts for the availability of fees and rates along with whether prequalification is available.