Getting the best auto loan rates can save you thousands of dollars over the course of your loan. We at the MarketWatch Guides Team researched the top car loan providers to bring you the best options for financing or refinancing your vehicle. We compared interest rates, industry ratings and customer reviews to help you make an informed decision.
Who Has the Best Auto Loan Rates?
According to our research, AutoPay currently offers the best auto loan rate for new car purchases, with annual percentage rates (APR) as low as 2.99% for new vehicles. AutoPay, PenFed Credit Union, Auto Approve, Consumer’s Credit Union, Auto Credit Express and iLending also offer some of the most competitive rates available.
Best Auto Loan Companies
While AutoPay may offer the lowest rates for purchases, it may not be the best choice for every potential borrower seeking the best rate. The specific rate you’ll pay for an auto loan depends on individual circumstances that are based on factors that lenders weigh differently.
To find the best car loan for you, we encourage you to shop around and compare auto loan rates from various lenders — including banks, credit unions, dealerships and online providers. With that in mind, below we review several lenders offering the best rates, covering each of the top auto financing companies that made our list in detail.
AutoPay: Best Overall Auto Loan
Starting APR: 2.99% for new cars
Loan amounts: $2,500 to $100,000
Loan terms: 24 to 96 months
Availability: 50 states
Minimum credit score: 560
AutoPay is an online lending marketplace that offers auto loans, lease-buyout loans and auto loan refinancing. AutoPay also gives you greater flexibility with loan terms, which range from 24 to 96 months. This means you might be able to pay your auto loan off quickly with a shorter term.
Based on our research, borrowers with good credit can find APRs as low as 2.99% for new and used vehicles from AutoPay’s network of lenders. People with bad credit may still qualify for financing since the company’s minimum credit score for applicants is 560.
AutoPay Reviews
AutoPay has a solid reputation in the lending industry. The company holds an A+ rating and accreditation from the Better Business Bureau (BBB) and an 4.7-star rating on Trustpilot from over 500 customer reviews.
Positive AutoPay reviews center on the company’s excellent customer service, knowledgeable staff members and fast, transparent process. While in the minority, negative reviews mention high interest rates and issues with paperwork that led to car loans or refinancing not being approved.
PenFed Credit Union: Best Credit Union Loan
Starting APR: 5.24% for new cars and 6.49% for used vehicles
Loan amounts: $500 to $150,000
Loan terms: 36 to 84 months
Availability: 50 states
Minimum credit score: 650
Pentagon Federal Credit Union (or PenFed) offers competitive auto loan rates for both new and used vehicles. PenFed used to be primarily for military members and their families but is now open to the general public.
PenFed’s starting APRs for used vehicles are relatively low at 5.74%. but to be eligible for those rates, you’ll need to have good credit and use PenFed’s car-buying service. PenFed members get access to special deals, such as cash-back promotions, for shopping at partner dealerships.
However, qualifying for a PenFed auto loan might be hard for some. The credit union only accepts borrowers with credit scores of 650 or higher. In addition, PenFed has a $29 fee for late loan payments.
PenFed Credit Union Reviews
PenFed isn’t accredited by the BBB but is rated A+ by the organization.
The credit union has an impressive average rating of 4.6 out of 5.0 stars on Trustpilot based on more than 1,350 customer reviews. Customer ratings are considerably lower on the BBB website, however, where more than 230 reviewers give PenFed an average of 1.1 out of 5.0 stars.
Positive reviews consistently mention a smooth and easy loan application process and low rates. Customers reporting negative experiences tend to mention slow processing times for loan applications.
Auto Approve: Best Refinance Loan
Starting APR: 5.24% for new cars
Loan amounts: $5,000 to $85,000
Loan terms: 12 to 84 months
Availability: 50 states
Minimum credit score: 600
Auto Approve is a loan aggregator for vehicle refinancing and lease buyouts. The company works with a vast network of lenders, including banks, credit unions and finance companies, to find you the best auto refinancing rates.
Auto Approve can be a good choice if you’re looking to refinance but aren’t sure where to start. Once you apply for a refinance loan with the company, your application is assigned to one of its loan consultants. That person guides you through the entire refinance process, pointing you to the best loan options available and then submitting your application to the lender you choose.
Auto Approve has a minimum credit score of 600, which means anyone with poor credit won’t be eligible for a loan.
Auto Approve Reviews
Auto Approve is accredited by the BBB and holds an A+ rating from the organization. In addition to a nearly 4.3-star rating from more than 470 customer reviews on the BBB’s site, the company has an average of 4.6 stars across more than 7,300 reviews on Trustpilot.
There are many positive reviews of the company, and they typically cite Auto Approve’s smooth and easy process. Customers who leave negative reviews tend to mention unexpected fees.
Consumers Credit Union: Excellent Credit Union Loan
Starting APR: 5.94% for new cars and 6.19% for used vehicles
Loan amounts: No minimum or maximum
Loan terms: Up to 84 months
Availability: 50 states
Minimum credit score: 620
Illinois-based Consumers Credit Union is open to national membership. The lender’s rates are typical for the industry, but its lowest starting APR applies to vehicles made as far back as 2021. That means borrowers who want to refinance cars made in recent model years may get better rates with Consumers than they would getting used car loans with a different provider.
The credit union offers a wide range of terms and loan amounts. Its best auto-loan rates start at 5.54% for cars made in or after 2021. Other starting APRs include 5.79% for cars made from 2017 to 2020, and 7.04% for cars made in 2016 or older. As long as you qualify, you can borrow nearly any amount, with term lengths of up to 84 months.
While Consumers Credit Union is a membership-based organization and not a bank, anyone can become a member. All you need to do is provide a Social Security number or a tax identification number and pay a $5 nonrefundable fee to the Consumers Cooperative Association.
Consumers Credit Union Reviews
Consumers Credit Union has a relatively strong standing in the industry. It’s accredited by the BBB and holds an A+ rating from the organization.
There aren’t many Consumers Credit Union customer reviews online. However, the positive reviews we found praise the lender’s good customer experience, consistently great rates and low fees.
Customers are also pleased to be part of a member-owned organization instead of a bank. That said, people who report a negative experience with Consumers Credit Union mention technical issues and delays with applications.
Auto Credit Express: Best Purchase Loan for Bad Credit
Starting APR: Varies
Loan amounts: Varies
Loan terms: Varies
Availability: 50 states
Minimum credit score: 400
Auto Credit Express is a loan aggregator that specializes in bad-credit auto loans, matching consumers with lenders that meet their needs. We awarded the company with the title “Best Purchase Loan for Bad Credit.”
The company provides extensive tools and blog posts on its website to help you better understand credit and the car loan process. Once you apply for an auto loan, you’ll be able to compare offers from different lenders at the same time.
Auto Credit Express could be a great option for people who have very poor credit and can’t get loan approval from other providers. Its minimum credit score requirement is only 400, which opens eligibility to almost anyone.
Auto Credit Express Reviews
Auto Credit Express is accredited by the BBB and holds an A+ rating from the organization. Despite this rating, customers on the BBB’s site only give Auto Credit Express a 1.0-star rating. However, this is based on only a small number of reviews.
Trustpilot reviews are much more positive, as more than 3,500 consumers give the company an average of 4.5 stars. Trustpilot also rates the company as “Excellent.”
Positive reviews for Auto Credit Express mention excellent communication and customer service, while the few negative reviews describe a total lack of communication.
iLending: Best Refinance Loan for Bad Credit
Starting APR: Varies
Loan amounts: Varies
Loan terms: Varies
Availability: 50 states
Minimum credit score: 510
A refinance auto-loan specialist, iLending is a viable option for borrowers looking to get lower interest rates and better terms for their vehicles. The company works with a network of lenders and financial institutions. Its minimum credit score requirement is just 510, which is why we gave it the title “Best Refinance Loan for Bad Credit.”
Since iLending functions as an auto refinance marketplace, your loan rate and term will depend on which lender you choose to refinance with. ILending doesn’t provide purchase loans for new or used vehicles.
iLending Reviews
ILending’s reputation on customer service is positive overall. The company has an A+ rating and accreditation from the BBB, along with a 4.8-star rating average from almost 900 customer reviews. Similarly positive reviews can be found on Trustpilot, where iLending has a 4.8-star rating average from over 1,100 reviews.
The majority of positive reviews on both sites mention the ease of iLending’s approval process, great customer service and low auto-refinance rates.
While they’re in the minority, negative reviews of iLending do exist. The company has had 63 BBB complaints from consumers closed within the last three years. This is a small number compared to the amount of business the loan aggregator does.
The few complaints we found discuss problems with higher interest rates and higher loan amounts than the borrowers previously had.
Getting the Best Car Loan
Finding the best auto loan rates requires some background knowledge. There are many factors that determine the best auto loan rates you can get and several methods that can help you get the lowest rates possible.
Below, we’ll discuss what current auto loan rates are, what is considered a good interest rate and the difference between an interest rate and APR. We’ll also go over the factors that lenders consider when determining your auto loan rates.
How To Get the Best Car Loan Rates
There are many methods you can use to find the best auto loan rates for your situation. In the sections below, we’ll outline a few ways to lower your interest rates for new and used car financing.
1. Improve Your Credit Score
Your credit score is the primary factor that determines the best auto loan rates you’ll find from a lender. Even if you’re only able to improve your score by 30 to 40 points, the difference could be a huge help in getting lower interest rates.
Say you were planning to finance a used car and your credit score improved from 650 to 680. Your rates could improve from about 12% to around 8%, allowing you to save thousands of dollars on a used vehicle. There are many ways to improve your credit score, and below are seven steps you can take to get started and lower your auto loan rates.
2. Find a Co-Signer
If your credit score is less than desirable — but you need a car soon — getting a co-signer on your loan could make it easier to find lower rates. If a family member or friend has excellent credit, you could gain access to some of the best auto loan rates.
Read over your loan terms carefully to make sure you can cover monthly costs. If you make late payments or default on the loan, it will affect both your and your co-signer’s credit scores.
3. Shop Around for Car Loans
To find the most competitive rates available, compare auto loan offers from various lenders when making a decision on who to borrow money from. Technological advancements have made comparing rates online a key part of this process.
There are many online lending marketplaces that allow you to compare multiple providers at once, helping you find the best deal. On top of this, using an auto loan calculator lets you compare the total cost of each financing option.
4. Compare Auto Loan Rates
When comparing auto loan rates, there’s more to keep in mind than just APRs when you’re looking for the best rates possible. To see the big picture, do the math and look at the total cost of your loan over its lifetime — and not just the APR or the monthly payment.
What To Look for in a Car Loan
To get the lowest possible rate on a car loan, consider the following factors when shopping:
Interest Rates vs. APRs
An interest rate is the annual percentage of the loan that the lender charges you on top of the money you’re borrowing.
Let’s say you have a total loan of $60,000 that you have to pay back across 48 months. Every month would be $1,250, which would make every year $15,000 that you’d pay back. If you have an interest rate of 5.0% on this loan, 5.0% of $15,000 is $750. So every year, you’d pay back $15,750 on your loan.
Your loan’s APR (annual percentage rate) is your interest rate plus all loan fees. This is often the auto loan rate you’ll see advertised across lender and broker sites. Even a small difference in your APR could save you hundreds or thousands over the life of the loan.
Loan Terms
The loan term or term length refers to how long you have to repay your auto loan. The longer the loan term, the lower your monthly payments will likely be. However, you’ll pay significantly more in interest overall than you would with a shorter term.
Discounts
Some lenders offer rate discounts on their car loan products. One common discount is a reduction of your APR when you sign up for automatic payments from your bank account or credit card. Based on our research, providers usually offer to take between 0.25% and 0.5% off of your APR for signing up for autopay.
Fees and Penalties
Lenders often charge fees for missed or late car payments. Some auto lenders also charge borrowers prepayment penalties for paying loans off early because it reduces the amount of interest the lender collects. These fees and penalties are in the fine print of a loan contract, so read it carefully before agreeing to a loan.
What Is a Good Car Loan Interest Rate?
Generally speaking, a good auto loan interest rate is anything below 4.0%. However, what a good interest rate is for you depends heavily on your credit score and the average rates within your credit band. It’s best to look for rates below these averages when gauging what lenders to choose.
Best Auto Finance Rates: Conclusion
In this article, along with providing helpful purchasing tips for those who are looking for the best auto financing options, we reviewed the top six lenders offering the lowest auto loan rates:
- Best Overall Auto Loan: AutoPay
- Best Credit Union Loan: PenFed Credit Union
- Best Refinance Loan: Auto Approve
- Excellent Credit Union Loan: Consumers Credit Union
- Best Purchase Loan for Bad Credit: Auto Credit Express
- Best Refinance Loan for Bad Credit: iLending
Auto Loan Reviews: Our Ratings Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies.
We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.
- Industry standing: Our research team considered ratings from industry experts and each lender’s years in business when giving this score.
- Rates and discounts: Auto loan providers with low APRs, good discount opportunities and high loan amounts scored highest in this category.
- Availability: Companies that cover a variety of circumstances are more likely to meet consumer needs.
- Customer service: This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness, friendliness and helpfulness of each loan company’s customer service team based on our shopper analysis.
Our credentials:
- 300+ hours researched
- 25 companies reviewed
- 2,000+ consumers surveyed
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