Best Auto Loan Rates in 2023
Best Auto Loan Rates in 2023
MyAutoloan, Consumers Credit Union, AutoPay, PenFed Credit Union, and iLending offer the best auto loan rates for both new and used cars.
With the best auto loan rates, you can save a lot of money over the life of the loan. But because there are so many choices, it can be hard to find the right provider for your needs.
The Guides Auto Team looked into the best car loan companies, comparing interest rates, industry ratings, and customer reviews to help you decide how to pay for your car.
Who has the best rates on car loans?
Based on our research, myAutoloan, Consumers Credit Union, AutoPay, PenFed Credit Union, and iLending have the best rates for auto loans. Even though we’ve ranked these companies based on their prices, reputations, availability, and customer service, it’s smart to compare personalized quotes from each before making a choice.
Best Places to Get a Car Loan
Here are the companies we think have the best auto loan rates in the business. These car loan companies are reliable, have fair APRs, and usually give loans to a wide range of people.
When it comes to the best auto loan rates, each lender gives car buyers different numbers based on their own needs. One lender may have lower interest rates on auto loans for people with good credit,
while another may only lend to people with bad credit. In the table above, we show the starting APRs for the best lenders. However, only people with great credit will be able to get rates that low.
The online marketplace myAutoloan lets you compare interest rates from a number of lenders to find the best one for an auto loan. You can fill out the site’s online form with your personal information and get loan offers from lenders almost right away. This lets you compare the offers side by side. We call it the Best Low-Rate Choice because it’s easy to get and has great prices.
From what we’ve learned, the rates at myAutoloan are low compared to the rest of the industry. Through the company’s marketplace, people who want to borrow money for new cars can get rates as low as 3.69 percent APR. With a minimum credit score of 575, myAutoloan can be a good choice for people with bad credit.
Still, the company’s minimum loan for a car purchase is $8,000. This may mean that you have to spend more than you had planned on a car. Also, myAutoloan won’t let you borrow money on a car that is older than 10 years or has more than 125,000 miles on it. Some people might think that these rules are too strict.
In the business of auto financing, myAutoloan has a good name. It is a member of the Better Business Bureau (BBB) and has an A+ rating from that group.
Overall, customers are happy with myAutoloan. On Trustpilot, they gave it 4.3 out of 5 stars. There aren’t many reviews of myAutoloan elsewhere. This may be because myAutoloan only connects borrowers with lenders and doesn’t take care of loans itself.
Positive customer reviews always mention how easy it is to apply and how good the rates are. Customers who had bad experiences, on the other hand, said they got too many ads after giving the company their information through the website.
Our team tried to get myAutoloan to say something about these reviews, but we didn’t hear back.
Consumers Credit Union is a credit union in Illinois that is now open to people from all over the country. Even though the lender’s rates are average for the industry, it offers a wide range of terms and loan amounts, which is why our team gave it the Most Flexible Terms award.
There are many loan options at the credit union. Its best auto loan rates for members start at 4.69% APR. As long as you meet the requirements, you can borrow almost any amount for up to 84 months.
It’s important to keep in mind, though, that these rates only apply to cars made in 2020 or later. The company’s rates start at 4.94% APR for cars that are more than 10 years old.
Even though Consumers Credit Union is not a bank and is instead a membership-based group, anyone can join. All you have to do is give the Consumers Cooperative Association your Social Security number or your tax ID number and pay a non-refundable $5 fee.
Reviews of the Consumers Credit Union
Consumers Credit Union has a pretty good reputation in its field. It is recognized by the Better Business Bureau and has an A+ rating from that group.
There aren’t many online reviews of Consumers Credit Union from real people. But the reviews we did find that were good praised the lender’s good customer service, great rates, and low fees.
Customers are also happy to be part of an organization that is owned by its members instead of a bank. People who have had a bad experience with Consumers Credit Union have said that there were technical problems and delays with their applications.
Our team tried to get Consumers Credit Union to say something about these reviews, but we didn’t hear back.
AutoPay is an online marketplace for lending that offers low interest rates on auto loans and refinancing of auto loans. We think it’s the best auto loan company because it has low rates and flexible terms.
From what we’ve learned, AutoPay’s network of lenders can offer APRs as low as 2.99% for new and used cars to people with good credit. Even if you have bad credit, you may still be able to get good rates from this company, as long as your credit score is 575 or higher.
You also have more freedom with loan terms, which can be anywhere from 24 to 96 months. This means that you can choose to pay off your auto loan quickly with a shorter term or spread it out over several years.
Review of AutoPay
AutoPay has a good reputation in the lending business. The company has an A+ rating from the Better Business Bureau and a “Excellent” rating from more than 450 customers on Trustpilot.
Positive reviews about AutoPay focus on the company’s great customer service, knowledgeable staff, and quick, clear process. Even though they are in the minority, some of the bad reviews mention high interest rates and problems with paperwork that caused the car loan or refinance to be turned down.
Our team reached out to AutoPay to see what they had to say about these reviews, but we didn’t hear back.
Pentagon Federal Credit Union, also known as PenFed, is a military credit union with good rates on auto loans. We call it the Most Cohesive Process for Auto Loans because it helps people buy cars and is easy to use.
PenFed is mostly for people in the military and their families, but people who work for certain government agencies and nonprofits can also join. Even if you don’t belong to any of these groups, you can still join as long as you give money to a charity that is on the list.
PenFed’s starting APR for new cars is not too high at 4.44%. But you can only get that rate if you buy a new car through PenFed’s car buying service. Members of PenFed can get discounts and reimbursements for shopping at partner dealerships, just like members of most credit unions.
But it might be hard for some people to get a PenFed auto loan. The credit union will only lend to people with credit scores of at least 610. Also, PenFed charges a high $29 fee for loans that are paid late.
Review of PenFed Credit Union
The Better Business Bureau (BBB) does not accredit PenFed, but it does give the company an A+ rating.
The customer reviews for PenFed Credit Union are some of the best we’ve found. On Trustpilot, the group has a very good 4.6-star rating out of a possible 5. On the BBB website, however, reviewers give PenFed 1.2 out of 5 stars, which is a lot less than what customers say about it.
Positive reviews always mention how easy it is to apply for a loan and how low the rates are. When customers talk about bad experiences, they often talk about how long it took for loan applications to be processed.
Our team tried to get PenFed Credit Union’s take on these reviews, but they didn’t get back to us.
ILending is known as an expert in refinancing auto loans, which makes it a good choice for people who want to get better terms and lower interest rates for their cars. The company works with a network of lenders and banks to offer some of the lowest annual percentage rates (APRs) we’ve seen in the business.
Since it works as a marketplace for auto refinancing, the loan amount and terms will depend on which lender you choose. At this time, ILending does not offer loans for either new or used cars.
How much do auto loans cost now?
The annual cost of getting a loan to buy or refinance a car is called the auto loan rate. It is usually shown as a percentage, and it stays the same for the whole loan term.
Rates for auto loans depend a lot on your credit report. People with better credit tend to get lower interest rates on loans than people with bad credit. Rates are also affected by how old the car is. Rates are higher for used cars than for new cars.
Average auto loan rates right now
According to Experian’s State of the Automotive Finance Market Q2 2022 report, the image below shows the average rates for new and used cars based on buyers’ credit scores.
How Do Lenders Determine Your Auto Loan Rate?
Lenders set auto loan rates based on information about you and your car, just like insurance companies do. Here are some things that can change the rate on your car loan:
Credit score: Your credit score has by far the most impact on your rate. The best auto loan rates go to people with the best credit scores.
Loan term: In general, your interest rate will be higher the longer your loan term is.
Age of the car: Banks and other lenders usually charge higher interest rates for cars that are older.
Whether you buy a new or used car, most lenders save their best interest rates for loans for new cars. If you want a loan for a used car, you might have to pay more in interest.
Down payment: When you buy a car, some lenders will change your interest rate based on how much you put down.
Before you decide, make sure to compare auto loan quotes from different lenders. Some lenders may put more weight on things like your credit score than others. Do the math and look at more than just the APR to see how much your loan will cost you in the long run.
How to Get the Best Rates on Auto Loans
You can find the best auto loan rates for your situation in a number of ways. In the sections that follow, we’ll talk about a few ways to lower your interest rates when you finance a new or used car.
Make your credit score better.
The best auto loan rates you can get from a lender are mostly based on your credit score. Even if you can only raise your score by 30 to 40 points, that could be enough to help you get lower interest rates.
Say you wanted to buy a used car with a loan and your credit score went from 650 to 680. Your rates could go from 10% to about 6%, which would save you thousands of dollars on a used car. You can find 7 ways to improve your credit score in the image below.
Look for a co-signer.
If your credit score isn’t great but you need a car quickly, getting a co-signer on your loan could help you get the best interest rates. If a relative or friend has great credit, you might be able to get some of the best auto loan rates through them.
Carefully read over the terms of your loan to make sure you can afford the monthly payments, since late payments will hurt both your credit score and the credit score of your co-signer.
Compare Auto Loan Quotes
One of the best ways to find the best auto loan rates is to compare quotes online. There are many online marketplaces for loans that let you compare offers from different lenders at the same time. This helps you find the best deal. On top of that, you can find cheap ways to finance a car by using a car loan calculator to compare total costs.
When comparing auto loan quotes, what to look for
When you’re looking for the best auto loan rates, you need to think about more than just the APR. Here are some things to think about when comparing quotes for auto loans.
Interest rates: The interest rate is the percentage that the lender charges you to borrow money, and the APR is the interest rate plus all loan fees. Even small differences in your APR could save you hundreds or thousands of dollars over the life of the loan.
Loan length: Length means the amount of time you have to pay back your auto loan. The longer the loan term, the less likely it is that you will have to pay each month. But in the long run, you’ll pay a lot more in interest than you would on a short-term loan.
Discounts: Some loan companies offer lower interest rates on their car loans. When you sign up for automatic payments from your bank account or credit card, you can often get a lower APR. Based on what we’ve learned, most providers offer to lower your APR by 0.5% if you sign up for autopay services.
Charges and fines: Lenders often charge fees if a car payment is missed or if it is paid late. Some auto lenders also charge drivers fees if they pay off their loans early, since they’ll get less in monthly payments and interest. Most of the time, these fees and penalties are hidden in the small print of a loan contract, so read it carefully before you agree to it.
How to Try to Get a Car Loan
Even though the way you apply for an auto loan can be a little different depending on the lender, the process is mostly the same. Here are the steps you need to take to get an auto loan:
Make sure you’re eligible. Most lenders want you to be at least 18 years old and have a valid Social Security number or tax identification number.
Check your credit score. Different lenders have different minimum requirements for credit scores. Check your credit score first to see which lenders are likely to give you the best auto loan rates and to get an idea of how much you might pay.
Get preapproved. Some lenders let you get preapproved for an auto loan before you apply. Most of the time, you can do this on the website of a lender. This will help you figure out how much you can spend on a car before you start shopping. It will also give you something to talk about at the car lot.
Find your new car or truck: Once you know how much money you have, you can go shopping. Even dealerships you can visit in person have websites these days so you can do research quickly and easily.
Listen to the financing offer from the car lot: Dealerships have special connections with banks and may be able to get you better rates than you could find on your own. Tell them the rate you’ve already been approved for, and see if they can do better.
Look at the prices: Look at your preapprovals and the loan offer from the dealer. Sometimes, you can use online tools to get quotes from other lenders quickly. Make sure to read the fine print and look for hidden fees and other costs.
Pick the offer that works best for you: Think about everything about your loan offers, not just the APRs, and choose the one that fits your finances the best. Get your paperwork in order by working with the dealer. Sign for your loan when it’s ready.
Pay your monthly bills on time. If you don’t pay your monthly bills on time, you could face steep penalties or even have your car taken away by the lender. You can make sure you never miss a payment or pay late by setting up automatic payments.
Best Car Loan Rate: The End
The best auto loan rates can be found at different banks, credit unions, online lenders, and dealers. There are also many things that can change your interest rates and many ways to get the lowest rates possible. To find the best auto loan for you, you should look around and compare your options.
What bank has the best rates for auto loans?
People know that Bank of America has some of the best rates for auto loans. To find the best APRs for your car purchase, it’s smart to compare rates from different banks, credit unions, and online lenders.
Which credit union offers the best rates on auto loans?
People with good credit know that Consumers Credit Union and PenFed Credit Union have low auto loan rates. Make sure to compare the APRs of each lender to find the best rate for your car loan.
Which company is best for refinancing an auto loan?
We found that one of the best places to refinance a car loan is iLending. Through its online marketplace, it has some of the lowest rates on the market for refinancing auto loans.
What is a good rate of interest for a 72-month car loan?
Based on what we’ve learned, a 72-month car loan with an APR of less than 4% is a good deal. Most of the time, you’ll need to agree to a 36-month car loan to get the best rates on auto loans.
Is an interest rate of 2.9% good for buying a car?
Yes, 2.9% is a good rate for a car loan. This low of an interest rate on an auto loan is usually only available to people with good credit.
What time of year is best to buy a car?
Our research shows that the best time to buy a car is in October, November, and December, when prices are at their lowest and dealerships are trying to get rid of their stock.