How do you get the best auto loan rate?

To get the best possible rates, follow these tips: Boost your credit : Before shopping for a loan, spend some time improving your credit. Making all of your payments on time and reducing your credit card balances can boost your credit score within a few months. Shop around: Rates and terms vary, and you may qualify for a much lower rate from some lenders. Request multiple quotes to find the best deal. Add a co-signer: Some lenders allow you to add co-signers or joint applicants. If you have a creditworthy friend or relative willing to apply with you, you could qualify for a lower rate than you would by yourself. Choose a shorter term: Generally, lenders give the lowest auto loan rates to borrowers who choose shorter loan terms, such as 36 or 48 months. Choose the shortest term you can afford to get the best rates.

Does your credit score affect your auto loan rate?

Yes, your credit score can significantly impact the rates you get on a car loan. Experian reported that the average APR for those with poor to fair credit was in the double digits. See the best car loans for bad credit to find the best rates you can qualify for if this is your situation.

Can you negotiate lower auto loan rates?

If you have a strong credit history, you may be able to negotiate rates . Some dealerships and manufacturers offer special loan incentives for borrowers with excellent credit, so it’s worth trying. It can be helpful to get quotes from several dealers ahead of time so you can show dealers the loan options you’ve found elsewhere.

What is the best time of year to buy a car?

The best time to buy a car is generally October through December. This period is when dealerships are bringing on the newest model years, so they need to sell the previous year’s models to make room. Vehicles from the outgoing year may be significantly cheaper.

Best Auto Loan Rates of December 2023

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With rising car prices, you’ll likely need to take out a loan to buy a car. In fact, Experian reported that over 80% of new cars and nearly 40% of used cars were financed with auto loans in 2022.

Car loan rates can vary between lenders, so it pays to shop around. We researched the 25 leading auto loan purchase and refinance lenders to identify the best, based on their available APRs, loan types, repayment terms, borrower/vehicle requirements, and more; we also conducted a survey of 1,016 auto loan customers, looking at opinions about lenders and the loan process.

Best Auto Loan Rates of December 2023

Best for Fast Loans: PenFed
Best for Low Rates and Bad Credit: AUTOPAY
Best Credit Union for Auto Loans: Consumers Credit Union
Best Refinance Marketplace: LendingTree
Best for Fair Credit: LendingClub
Best for Complete Car Buying Experience: Carvana
Best for High Maximum Accepted Mileage: OpenRoad Lending

Best for Fast Loans : PenFed

Used APR Range: As low as 6.49%
Used Loan Amounts: Not disclosed
Used Loan Terms: 3–7 years

Get a Quote

Pros & Cons

Pros

Quick loan application
Works directly with dealerships
Extra bonuses and incentives available

Cons

Limited loan term options
Minimum loan amount for longer terms

Why We Chose It

PenFed Credit Union allows you to apply for a car loan entirely online. After receiving your preapproval letter, you can submit your identification and sign the loan agreement shortly after, allowing you to finance a vehicle as soon as the same day you apply.

If you go through PenFed’s car buying service, you may qualify for additional cash bonuses or discounts on a new or used vehicle from a participating dealership.

The minimum loan amount for terms of 61 to 72 months is $15,000, and the minimum loan amount for terms of 73 to 84 months is $20,000.

You do need to be a member of the credit union to qualify for a loan, but PenFed’s membership is open to the general public.

Borrower Qualifications

PenFed Credit Union does not disclose its credit score or income requirements. To qualify for a loan, borrowers must be the age of majority in their state and be members of the credit union. If you’re not a member, you can join online during the application process by opening a savings account with as little as $5.

Penfed’s auto loans are available in all 50 states and Washington, D.C.

Vehicle Qualifications

For loans less than seven years: No limit on vehicle age, and must have 125,000 miles or fewer
For loans of with a seven-year term: Vehicle must be less than five years old and be under 60,000 miles
Maximum loan-to-value ratio: 125%
Allows private-party vehicle purchases: Yes

Best for Low Rates and Bad Credit : AUTOPAY

Used APR Range: As low as 5.69%
Used Loan Amounts: $2,500–$100,000
Used Loan Terms: 2–8 years

Get a Quote

Pros & Cons

Pros

Network of credit unions and lenders
Lower than average rates available
Allows co-borrowers

Cons

Does not disclose APR range
Some lenders may charge origination fees
Eligibility requirements vary by lender

Why We Chose It

AUTOPAY isn’t a lender. Instead, it connects you with its network of partner lenders. Its partners often offer lower than average rates, and you can qualify for a loan even if you have less-than-perfect credit.

AUTOPAY’s partners allow you to apply with a co-borrower to qualify for a better rate, and loan terms can be as long as 96 months for certain loan types. AUTOPAY has a prequalification tool that allows you to view your loan options without affecting your credit score.

However, eligibility requirements can vary, and the company isn’t clear about the available rates or fees.

Borrower Qualifications

Must be the age of majority in your state
Must have a valid driver's license
Must provide proof of income and residency
Available in all 50 states and Washington, D.C.

Vehicle Qualifications

Maximum accepted vehicle age: Not disclosed
Maximum accepted mileage: Not disclosed
Maximum loan-to-value ratio: Not disclosed
Allows private-party vehicle purchases: Yes

Best Credit Union for Auto Loans : Consumers Credit Union

Used APR Range: As low as 6.84%
Used Loan Amounts: Not disclosed
Used Loan Terms: 0–84 months

Get a Quote

Pros & Cons

Pros

Membership open to the public
Car-buying services available
Gap coverage available

Cons

Higher rates for older vehicles
Must submit Social Security number to view rates

Why We Chose It

Consumers Credit Union allows members to borrow up to 100% of the purchase price of a new vehicle, and it also has car-buying services that can make the process easier than completing it on your own.

Consumers CU has services and protections you can add to your policy, including guaranteed asset protection (GAP) coverage and maintenance plans, to protect your new vehicle.

You must be a member to qualify for a loan, but Consumers Credit Union’s membership is open to the general public. And the only way to view potential rates is to submit your personal information and Social Security number.

Borrower Qualifications

Consumers Credit Union is available in all 50 states and Washington D.C.; it doesn’t disclose its minimum income or credit score requirements. Borrowers must be at least 18 years of age.

You must join the credit union to take out a loan. To become a member, you must join the Consumers Cooperative Association which costs $5. You must also deposit $5 into a Consumers Credit Union savings account.

Vehicle Qualifications

Maximum accepted vehicle age: None
Maximum accepted mileage: None
Maximum loan-to-value ratio: 100%
Allows private-party vehicle purchases: Not disclosed

Vehicles that are 2020 model year or older will have higher rates than newer vehicles.

Best Refinance Marketplace : LendingTree

Refinance APR Range: As low as 4.50%
Refinance Loan Amounts: $250-$500,000
Refinance Loan Terms: 12–120 months

Get a Quote

Pros & Cons

Pros

Review offers from multiple lenders
Low rates available
Some partners allow joint applications

Cons

Some lenders charge added fees
Loan minimums and terms vary by partner
Eligibility requirements vary by partner lender

Why We Chose It

LendingTree is a marketplace that connects users with its network of lenders. For borrowers looking to refinance an existing auto loan, LendingTree can be an excellent way to comparison shop and find the best rates.

LendingTree’s partners offer lower-than-average rates, and you can add a joint applicant to improve your odds of qualifying for a loan.

Eligibility requirements and terms vary by the lender underwriting the loan, and some lenders charge origination or application fees.

A longer loan term will give you a smaller monthly payment, but you’ll pay more in interest. Use our car loan calculator to see how rates and loan terms affect your total loan cost.

Borrower Qualifications

LendingTree is available in all 50 states and D.C., but borrower requirements vary by lender.

Vehicle Qualifications

Maximum accepted vehicle age: Varies with lender
Maximum accepted mileage: Varies with lender
Maximum loan-to-value ratio: Varies with lender
Allows private-party vehicle purchases: No

Best for Fair Credit : LendingClub

Refinance APR Range: 5.99%–24.99%
Refinance Loan Amounts: $4,000–$55,000
Refinance Loan Terms: 24–84 months

Get a Quote

Pros & Cons

Pros

Lower than average rates available
Connects borrowers to multiple offers
Joint applications accepted

Cons

Does not offer purchase loans
Not available in all states
Low loan maximum

Why We Chose It

LendingClub is another marketplace that connects borrowers to lenders providing auto loan refinancing.

Borrowers can find loans with terms as long as 84 months, and you can compare offers from multiple lenders to find the best rates. However, LendingClub’s refinancing options aren’t available in all states, and it has a relatively low loan maximum compared to other lenders.

Borrower Qualifications

Must be at least 18 years of age
Must be a U.S. citizen or permanent resident or live in the U.S. on a valid, long-term visa
Must live in an eligible state; residents of the District of Columbia and the following states cannot qualify for a loan: Alaska, Hawaii, Maine, New Hampshire, North Dakota, Vermont, West Virginia, Wyoming
Current auto loan must have been open for at least one month
Current auto loan must have at least 24 months remaining
Vehicle must be less than 10 years old and have fewer than 120,000 miles

Vehicle Qualifications

Maximum accepted vehicle age: 10 years
Maximum accepted mileage: 120,000 miles
Maximum loan-to-value ratio: Not disclosed
Allows private-party vehicle purchases: No

Additional requirements:

Must have at least 24 months left on the existing loan
Loan’s remaining balance must be between $5,000 and $55,000
Vehicle must be registered in the same state you live
Many cars not eligible for financing, such as the Nissan Leaf and models from Suzuki, Saab, Pontiac, Oldsmobile, Hummer, and many more brands

Best for Complete Car Buying Experience : Carvana

APR Range: Not disclosed
Loan Amounts: Price of any vehicle Carvana is selling
Loan Terms: 36 to 72 months

Get a Quote

Pros & Cons

Pros

Finance and shop for a car in one place
Loan quotes valid for 30 days
Loans available to borrowers with poor credit

Cons

Can only finance Carvana vehicles
May pay extra shipping fees
Not available nationwide

Why We Chose It

If the traditional car buying experience at dealerships stresses you out, Carvana may be a good alternative. You can shop for a car and apply for a loan online through a single platform, and you can view your loan options without affecting your credit score.

Carvana sells used vehicles throughout most of the country, and it will even deliver the car directly to your door. When you find a car you like, you can apply for financing through Carvana. Carvana works with borrowers with poor to excellent credit, and it also allows you to add a co-signer to your application to improve your odds of qualifying for a loan.

Carvana financing can only be used to buy cars on its platform, so you can’t take out a loan and buy a car from a dealer or private seller. And depending on where your selected car is located, there may be additional shipping fees.

Borrower Qualifications

Must be at least 18 years old
Minimum annual income of $4,000
Must not have any active bankruptcies
Available to residents in the contiguous U.S. states

Vehicle Qualifications

Maximum accepted vehicle age: Varies
Maximum accepted mileage: Any car Carvana is selling
Maximum loan-to-value ratio: Not disclosed
Allows private-party vehicle purchases: No (only vehicles listed on the Carvana platform are eligible for financing)

Best for High Maximum Accepted Mileage : OpenRoad Lending

Refinance APR Range: As low as 1.99%
Refinance Loan Amounts: $7,500–$100,000
Refinance Loan Terms: 2–6 years

Get a Quote

Pros & Cons

Pros

Less-than-perfect credit accepted
Low rates available
Refinances vehicles with up to 140,000 miles
Loan-to-value ratio up to 175%

Cons

Self-employed borrowers need to show additional documents
Not available nationwide
Some car models not available for financing

Why We Chose It

OpenRoad Lending offers auto loan refinancing to borrowers in 38 states. Borrowers can potentially qualify for significantly lower interest rates through OpenRoad, and the lender is one of the few that will accept vehicles with odometer readings as high as 140,000 miles. It offers loans with an exceptionally high LTV ratio as well, up to 175%.

OpenRoad Lending works with a broad range of credit scores, and it has a relatively low income requirement.

Borrower Qualifications

Must be at least 18 years of age
$2,000 gross monthly income
Loan payment cannot exceed 10% of your gross monthly income

Vehicle Qualifications

Maximum accepted vehicle age: 8 years
Maximum accepted mileage: 140,000 miles
Maximum loan-to-value ratio: 175%
Allows private-party vehicle purchases: No
Restrictions: No business vehicles, and Oldsmobile, Daewoo, Hummer, Isuzu, Saab, and Suzuki vehicles are not eligible for refinancing

Final Verdict

If you’re looking to buy a new or used vehicle, AUTOPAY, Consumers CU, and PenFed offer loans with low rates and multiple repayment options. And both of the credit unions are open to the general public, so you can easily become a member and take advantage of their auto loans.

For those who want to refinance their loans, LendingTree and OpenRoad Lending can connect you to partner lenders to refinance your car at a lower rate or with different repayment term.

Whatever your goal is, shopping around and requesting quotes from the best auto loan lenders can help you find a better deal on a new car than you’d get through a dealership’s financing department.

Guide to Choosing the Best Auto Loan Rates

Types of Auto Loans

New car loans: A new car loan finances the cost of a new vehicle, meaning one that has just been manufactured. Typically, you buy new cars from dealers or directly from the manufacturer.
Used car loans: Used cars loans are used to purchase vehicles that were previously owned. Some lenders have restrictions on the car’s make, model, and mileage.
Antique or collector car loans: Antique or collector loans are specialty loans for vintage or unique vehicles that may be outside traditional lenders’ restrictions.
Auto refinance loans: Refinancing is replacing an existing auto loan with a new one. Typically, a borrower refinances to get a lower rate or different repayment term.
Cash-out refinance loans: A cash-out refinance loan allows you to borrow more than the car’s value. A borrower may use a cash-out refinance to refinance an existing loan and get cash for other expenses.
Title loans: An auto title loan is a type of short-term loan that gives you a lump sum of cash. The loan is secured by your car’s title. These loans tend to have very high rates and short terms, and are a risky form of debt.

How To Compare Auto Loans

Take the following loan and lender details into consideration:

APR: The APR is how much you pay in interest and fees over a year, presented as a percentage. In general, car loan rates range from 2% to 14%.
Fees: Some lenders charge additional fees, such as origination fees or prepayment penalties, that add to the loan cost.
Term lengths: Car loans usually have terms of 36 to 84 months, though some lenders do offer longer terms. The longer the term, the smaller your monthly payment will be, but the more you’ll pay in interest overall.
Vehicle restrictions: Vehicle restrictions vary by lender. In general, used car loans and refinancing loans are only available on cars that are eight years old or newer and that have fewer than 120,000 miles, but some lenders are more lenient; some may have no restrictions at all.

How To Apply for an Auto Loan

Follow these steps to get a car loan:

Review your credit: Review your credit reports at AnnualCreditReport.com to make sure all of the information is accurate. If there are any errors, dispute them ahead of time so that your credit is as strong as possible.
Request quotes: Compare quotes from several companies. Many lenders have prequalification options, so you can view available rates and terms without affecting your credit. Look for preapproval forms, in other cases.
Fill out the application: Most lenders allow you to apply online. You’ll have to provide information about your income, employment, and Social Security number. You will also need to consent to a hard credit check, which can cause your score to drop by a few points.
Purchase your car: If your application is approved, you can take the loan approval letter with you to buy a car. Or, if you’re buying a car through dealer financing, you can complete the purchase process immediately after your financing is approved.

Auto Loan Rates by Credit Score

Credit Score	Average APR (New Car)	Average APR (Used Car)
781–850	4.75%	5.99%
661–780	5.82%	7.83%
601–660	8.12%	12.08%
501–600	10.79%	17.46%
300–500	13.42%	20.62%

Source: Experian: State of the Automotive Finance Market Q4 2022

Frequently Asked Questions

How do you get the best auto loan rate?
To get the best possible rates, follow these tips:
- Boost your credit: Before shopping for a loan, spend some time improving your credit. Making all of your payments on time and reducing your credit card balances can boost your credit score within a few months.
- Shop around: Rates and terms vary, and you may qualify for a much lower rate from some lenders. Request multiple quotes to find the best deal.
- Add a co-signer: Some lenders allow you to add co-signers or joint applicants. If you have a creditworthy friend or relative willing to apply with you, you could qualify for a lower rate than you would by yourself.
- Choose a shorter term: Generally, lenders give the lowest auto loan rates to borrowers who choose shorter loan terms, such as 36 or 48 months. Choose the shortest term you can afford to get the best rates.
Does your credit score affect your auto loan rate?

Yes, your credit score can significantly impact the rates you get on a car loan. Experian reported that the average APR for those with poor to fair credit was in the double digits. See the best car loans for bad credit to find the best rates you can qualify for if this is your situation.
Can you negotiate lower auto loan rates?

If you have a strong credit history, you may be able to negotiate rates. Some dealerships and manufacturers offer special loan incentives for borrowers with excellent credit, so it’s worth trying. It can be helpful to get quotes from several dealers ahead of time so you can show dealers the loan options you’ve found elsewhere.
What is the best time of year to buy a car?

The best time to buy a car is generally October through December. This period is when dealerships are bringing on the newest model years, so they need to sell the previous year’s models to make room. Vehicles from the outgoing year may be significantly cheaper.

When negotiating with a dealer, be sure to focus on the out-the-door price—the total price of the car inclusive of all taxes, title, and fees. Discussing the out-the-door price will help you avoid surprises.

Other Types of Auto Loans

Methodology

The Balance is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs. We also conducted a survey of 1,016 auto loan borrowers for attitudes and opinions about lenders and the loan process.

Article Sources

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Pentagon Federal Credit Union. “PenFed Membership.”
AutoPay. "Vehicle Purchase."
AutoPay. "Auto Loan FAQ," Click "What Are Your Minimum and Maximum Loan Terms (Months)?"
Consumers Credit Union. "Get a Beauty of a Deal With Our Low APR* Car Loans."
Consumers Credit Union. “Membership.”
LendingTree. "Best Auto Loan Refinance Rates in December 2023."
LendingClub. “Auto Loan Refinancing.”
LendingClub. "What Is Auto Refinance?"
Carvana. "Car Payment Calculator."
Carvana. "If I Have Bad Credit, Can I Still Finance My Purchase Through Carvana?"
Carvana. "Do You Service Alaska & Hawaii?"
OpenRoad Lending. “Refinance Your Vehicle.”
OpenRoad. "Auto Refinance and Car Loan Rates."
OpenRoad Lending. "OpenRoad Lending Reaches Milestone of 200,000 Customers."
OpenRoad. "Terms and Conditions Pre Qualifed Offer."
Experian. "State of the Automotive Finance Market Q4 2022," Pages 28, 41.
Edmunds. "When Is the Best Time to Buy a Car?"