Purchasing a car is a significant financial decision, and securing the right auto loan can make all the difference in managing your finances effectively. With numerous lenders in the market, each offering different rates and terms, finding the best auto loan can be a daunting task. To help you navigate this complex landscape, we’ve reviewed and compiled a list of the best Auto Loan Providers in the USA for 2024.
Top Auto Loan Companies
We found that the best auto loan companies are Autopay, PenFed Credit Union, Auto Approve, Consumers Credit Union, Auto Credit Express, and iLending. To find the best car loan for you, it’s important to shop around and compare rates from various lenders, including banks, credit unions, dealerships, and online providers.
1. AutoPay: Best Auto Loan Rates
Starting APR: 4.67% for refinancing or 5.69% for new and used car purchase loans
Loan Amounts: $2,500 to $100,000
Loan Terms: 24 to 96 months
Availability: 50 states
Minimum Credit Score: 560
Overview:
AutoPay is an online lending marketplace offering auto loans, lease-buyout loans, and auto loan refinancing. They provide flexible loan terms ranging from 24 to 96 months, which allows borrowers to choose a repayment plan that suits their financial situation.
Pros:
- Offers prequalification with a soft credit check.
- Low APRs for borrowers with good credit.
- No application fees or prepayment penalties.
- Offers guaranteed asset protection (GAP insurance).
Cons:
- Loan funding can take a while.
Reviews:
AutoPay has an A+ rating and accreditation from the Better Business Bureau (BBB) and a 4.7-star rating on Trustpilot from over 500 customer reviews. Positive reviews highlight excellent customer service and a smooth process, while negative reviews mention high interest rates and paperwork issues.
2. PenFed Credit Union: Best Credit Union Auto 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
Overview:
PenFed Credit Union offers competitive auto loan rates for new and used vehicles. While PenFed was originally for military members, it is now open to the general public. They provide discounts through their car-buying service and various cash-back promotions.
Pros:
- Low auto loan rates.
- Discounts through car-buying service.
- Debt protection available for a fee.
Cons:
- Available only to members.
- High late payment fee.
- Requires fair or better credit.
Reviews:
PenFed holds an A+ rating from the BBB and a 4.6-star rating on Trustpilot from more than 1,350 customer reviews. Positive reviews mention smooth loan applications and low rates, while negative reviews often cite slow processing times.
3. Auto Approve: Best Auto Refinance Rates
Starting APR: 5.24%
Loan Amounts: $5,000 to $85,000
Loan Terms: 12 to 84 months
Availability: 50 states
Minimum Credit Score: 600
Overview:
Auto Approve is a loan aggregator specializing in vehicle refinancing and lease buyouts. They work with a vast network of lenders to find the best refinancing rates for their customers.
Pros:
- 4.6-star customer review score on Trustpilot.
- Low rates for customers with good credit scores.
- Online application doesn’t require a hard credit check.
Cons:
- Some complaints about unexpected fees.
Reviews:
Auto Approve is accredited by the BBB and holds an A+ rating from the organization. They have an average of 4.6 stars across more than 7,300 reviews on Trustpilot. Positive reviews highlight a smooth process, while negative reviews mention unexpected fees.
4. Consumers Credit Union: Excellent Credit Union Auto Loan
Starting APR: 6.54% for new cars and 6.93% for used vehicles
Loan Amounts: No minimum or maximum
Loan Terms: Up to 84 months
Availability: 50 states
Minimum Credit Score: 620
Overview:
Illinois-based Consumers Credit Union offers competitive rates and terms for auto loans, with the lowest starting APR applying to vehicles made as far back as 2021. Membership is open to anyone who pays a $5 nonrefundable fee.
Pros:
- Very flexible lending terms.
- Up to 100% financing.
- No minimum or maximum loan amount.
Cons:
- Available only to members.
- Few branches.
- Must use autopay to get the lowest rates.
Reviews:
Consumers Credit Union is accredited by the BBB and holds an A+ rating. Positive reviews praise good customer experience and low fees, while negative reviews mention technical issues and delays.
5. Auto Credit Express: Best Auto Loan for Bad Credit
Starting APR: Varies
Loan Amounts: Varies
Loan Terms: Varies
Availability: 50 states
Minimum Credit Score: 400
Overview:
Auto Credit Express is a loan aggregator that specializes in bad-credit auto loans. They match consumers with lenders that meet their needs and provide extensive tools to understand the car loan process.
Pros:
- Open to borrowers with bad credit.
- May offer special programs for military members.
- A+ rating from the BBB.
Cons:
- Not a direct loan provider.
- Applying brings you many lender calls.
Reviews:
Auto Credit Express is accredited by the BBB with an A+ rating. Trustpilot reviews are positive, with an average of 4.5 stars from more than 3,500 consumers. Positive reviews mention excellent communication, while negative reviews describe a lack of communication.
Getting the Best Car Loan
Finding the best auto loan rates requires understanding various factors that influence these rates. Below, we discuss what current auto loan rates are, what constitutes a good interest rate, and the difference between an interest rate and APR. We also cover factors that lenders consider when determining your auto loan rates.
How To Get the Best Car Loan Rates
- Improve Your Credit Score:
Your credit score is the primary factor determining the best auto loan rates. Even a slight improvement in your score can significantly lower your interest rates. - Find a Co-Signer:
If your credit score is less than desirable, getting a co-signer with excellent credit can help you secure better rates. - Shop Around for Car Loans:
Compare offers from various lenders to find the most competitive rates. Online lending marketplaces can help you compare multiple providers at once. - Compare Auto Loan Rates:
Look beyond just APRs to consider the total cost of the loan over its lifetime, including any hidden fees.
What To Look for in The Best Car Loans
- Interest Rates vs. APRs:
An interest rate is the annual percentage of the loan charged by the lender, while APR includes all loan fees. Even a small difference in APR can save you a significant amount over the life of the loan. - Loan Terms:
The loan term affects your monthly payments and the total interest paid. Longer terms result in lower monthly payments but higher total interest. - Discounts:
Some lenders offer rate discounts for signing up for automatic payments. - Fees and Penalties:
Be aware of fees for missed or late payments and any prepayment penalties for paying off the loan early.
What Is a Good Car Loan Interest Rate?
A good auto loan interest rate is generally below 4.0%. However, the best rate for you depends on your credit score and the average rates within your credit band.
Average Auto Loan Rates
According to Experian’s State of the Automotive Finance Market Q4 2023 report, the average interest rates for new and used cars based on credit scores are as follows:
| Credit Score | Average New Car Loan APR | Average Used Car Loan APR |
|---|---|---|
| 781 to 850 | 5.64% | 7.66% |
| 661 to 780 | 7.01% | 9.73% |
| 601 to 660 | 9.60% | 14.12% |
| 501 to 600 | 12.28% | 18.89% |
| 300 to 500 | 14.78% | 21.55% |
How Are Auto Loan Rates Determined?
Factors influencing auto loan rates include:
- Credit Score: Higher scores receive lower rates.
- Loan Term: Longer terms generally have higher rates.
- Loan Type: Used car loans typically have higher rates than new car loans.
- Down Payment: Larger down payments can result in lower rates.
Best Way To Apply for an Auto Loan
- Make Sure You’re Eligible:
Most lenders require you to be at least 18 years old and have a valid Social Security number or tax identification number. Credit unions usually require membership. - Check Your Credit Score:
Know your score to understand which lenders might offer you the best rates. - Get Preapproved:
Preapproval can help you understand what you can afford and negotiate better rates at the dealership. - Find Your New Vehicle:
Shop within your budget, considering both online and physical dealerships. - Listen to the Dealer’s Offer:
Dealers may offer competitive rates due to their relationships with lenders. - Compare Offers:
Look at all aspects of your loan offers, including hidden fees. - Choose the Best Offer:
Consider the overall cost and fit for your financial situation.
Compare Car Loan Rates
The table below highlights the lenders offering the best car loan rates, allowing for easy comparison of top lenders’ best rates and terms:
| Top Auto Loan Lender | Lowest APR | Loan Amount | Term Length | Our Award |
|---|---|---|---|---|
| AutoPay | 4.67% | $2,500 to $100,000 | 24 to 96 months | Best Auto Loan Rates |
| PenFed Credit Union | 5.24% | $500 to $150,000 | 36 to 84 months | Best Credit Union Auto Loan |
| Auto Approve | 5.24% | $5,000 to $85,000 | 12 to 84 months | Best Auto Refinance Rates |
| Consumers Credit Union | 6.54% | No minimum or maximum | Up to 84 months | Excellent Credit Union Auto Loan |
| Auto Credit Express | Varies | Varies | Varies | Best Auto Loan for Bad Credit |
Securing the best auto loan requires careful consideration of various factors, including interest rates, loan terms, and fees. By shopping around and comparing offers from multiple lenders, you can find the loan that best fits your financial situation. Remember to consider not only the APR but also the total cost of the loan over its lifetime. With the right information and a bit of effort, you can drive away with the best possible deal on your auto loan.
