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How to get the best rates on your new car loans.
• Starting APR: 4.5%
• Loan length: Up to 96 months
Pros + Cons
✓ Lowest APRs on the market
✓ Can seamlessly compare rates with different providers
X Lenders may do hard credit check, depending on their individual policies
• Starting APR: 5.14%
• Loan length: Up to 72 months
Pros + Cons
✓ Loans available to drivers with bad credit
✓ Special financing discounts for military
X Must have high income as a driver with low credit
• Starting APR: 5.99%
• Loan length: Up to 72 months
Pros + Cons
✓ Discounts available to Bank of America members
✓ Easy approval process
X Not the lowest APR
Average annual percentage rates (APR) for car loans jumped to 7.18% in 2023, which is a 15-year high in the U.S.1 As interest rates for auto loans continue to increase due to persistent inflation, you may find it difficult to find a loan that makes sense for your budget. Despite the financial strain of the economy, it’s important to remember that there are smart shopping strategies you can employ to earn lower APRs for your auto loans, like bringing up your credit score, taking advantage of membership discounts, and applying for lower loan terms.
Read on to learn about our top picks for auto loan providers and how you can employ smarter strategies to ensure you’re getting the best loan terms and lowest rates. We’ve also ranked the best auto loans overall and created an auto loan calculator to estimate your payments.
Editor’s Note (Last Updated: May 22, 2024) – We updated this list of the best auto loans for new cars to reflect the latest interest rates and details.
Best Interest Rates: LendingTree
Best New Car Loans With Bad Credit: Auto Credit Express
Best New Car Loans From a Bank: Bank of America
Best New Car Loans From a Credit Union: PenFed Credit Union
Feature | LendingTree | Auto Credit Express | Bank of America | PenFed Credit Union |
---|---|---|---|---|
Best for | Lowest interest rates | Drivers with bad credit | Bank loans | Credit union loans |
Loan provider or aggregator | Aggregator | Aggregator | Loan provider | Loan provider |
Loan term | 12-96 months | 36-72 months | 48-72 months | 36-72 months |
Minimum APR | 4.50% | 5.14% | 5.99% | 4.74% |
Loan amounts | Varies by lender, up to $500,000 | Varies by lender | Up to $85,000 for prequalification | $15,000-$150,000 |
BBB accreditation? | Yes | Yes | Yes | No |
BBB rating (A-F) | A+ | A+ | A- | A+ |
Trustpilot rating (out of 5) | 4.36 | 4.5 | 1.9 | 4.3 |
Year founded | 1996 | 1999 | 1904 | 1935 |
LendingTree is an auto loan aggregation service that lets you view multiple offers from different lenders at once. LendingTree is better for those with good credit, as it offers the lowest interest rates of any service we’ve seen, with APRs starting at 4.5 percent. Not everyone will qualify for this super-low APR, but if you have a great credit score, LendingTree is a fantastic option.
LendingTree has the lowest minimum APR we’ve seen from any loan provider or loan aggregator, starting at 4.5 percent. This is a solid option for someone who has great credit, is gainfully employed, and has a high income. If that’s not you, keep in mind that LendingTree doesn’t have a minimum credit score requirement and can connect you with a provider that will accept your score or lack of score.
Since LendingTree lets you shop multiple lenders at once, you’ll be able to find loan terms from 12 to 96 months, or one to seven years. Of course, the longer your loan term, the smaller your monthly payment will be. However, a longer term length will result in more interest payments, so if you’re in a good spot financially, we recommend getting a short-term loan with a low APR. Our auto loan calculator shows you how different loan terms affect your monthly payments and the amount of interest you’ll pay over the lifetime of the loan.
Your loan amount will depend on your provider, but you can get up to $500,000 from LendingTree, which is more than enough for the majority of American drivers. Another way to look at a loan amount is the loan-to-value (LTV) ratio. LendingTree has providers that offer up to 125 percent of your vehicle’s value. That means that if you total your car, you’ll receive 25 percent more than its current value to pay for a new car. This is helpful because your car’s value will have depreciated from when you first purchased it.
TIP:
We recommend buying gap insurance to cover the remainder of your auto loan if you total your car.
If you want to shop for multiple loan providers at once, check out Auto Credit Express. Like LendingTree, it’s not a lender itself, but it can pre-qualify you for loans with multiple lenders. That way, you can shop the entire market in one place without filling out a million online forms with separate lenders. If you’re looking for an auto loan with low credit, Auto Credit Express is for you.
If you have bad credit, unfortunately, expect to find higher APRs. You’ll be considered less trustworthy than someone with good credit. Some loan providers have minimum credit scores and won’t cover you at all if you don’t reach their threshold. Auto Credit Express is ideal for someone with bad credit. While APRs, loan amounts, and terms will vary by lender, you can find an auto loan from Auto Credit Express if you can prove the following:
Auto Credit Express also has options for people with no credit and people who have filed for bankruptcy.
Auto Credit Express has accreditation and an A+ rating from the Better Business Bureau (BBB). The company’s rating is partly based on the following factors:
If you’re an active member of the military, reservist, veteran, or family member of any of those, you could receive special military financing and discounts. You’ll see lower APRs and down payments, better loan terms, and more approvals.3 While you’re at it, check out the best auto insurance for those connected to the military.
Instead of shopping for an auto loan from companies you’re unfamiliar with, you can always have your current bank finance your vehicle. If you’re already a Bank of America rewards member, consider it a possible auto loan provider.
If you’re already a member of Bank of America’s Preferred Rewards program, you can enjoy discounts on your auto loan anywhere from 0.25 to 0.5 percent, depending on your membership level.
Factor | Gold | Platinum | Platinum honors |
---|---|---|---|
Combined balance range in Bank of America deposit and/or Merrill investment accounts | $20,000-$49,999 | $50,000-$99,999 | $100,000-$1,000,000 |
Car loan interest rate discount | 0.25% | 0.35% | 0.5% |
Membership is available in all parts of the U.S., including Washington, D.C. You’ll benefit from Bank of America’s 120 years in business and the same customer service you already enjoy as a member.
DID YOU KNOW?
Bank of America has an A+ rating with the Better Business Bureau and has been accredited for 76 years.4
Easy and Fast Approval Process
Applying for an auto loan from Bank of America only takes a minute. Simply provide the following information online:
Once you get approved, the offered amount will be locked in for 30 days, so you have time to think about it without losing the best interest rates. You can finish the process entirely online.
RELATED:
Our dealer vs. bank financing calculator helps you decide whether you’ll save more by taking a low interest rate from a dealer, or a cash rebate and financing with a bank.
One of the advantages of going with a traditional bank is its reliability. Bank of America has been in business for 120 years and is BBB-accredited since 1949, with an A+ rating.
BoA has a high number of customer complaints due to its vast customer base, but it has closed 7,485 of them in the past three years, and 2,605 of those in the past 12 months. While customer complaints are inevitable, we appreciate how BoA resolves them.
Some people use credit unions rather than traditional banks as their financial institutions. If you prefer a credit union to a bank or traditional lender, consider Pentagon Federal Credit Union, or PenFed. Anyone is eligible to join PenFed, and with an A+ rating from the BBB and a 4.3-star rating out of five on Trustpilot,5 the credit union is a trustworthy auto loan provider.
On average, people who refinance their auto loans with PenFed save $191 per month.6 With loan terms anywhere from 36 to 72 months, the union offers APRs as low as 4.74 percent. Rates will be lower if you select a shorter term.
PenFed offers other financial protections aside from auto loans.
Feature | Easy Street Protection for Newer Cars | Easy Street Protection | Main Street Protection |
---|---|---|---|
Eligible vehicle model years | 2 or newer | 8 or newer | 8 or newer |
Eligible miles on odometer | 0-15,000 | 75,000 or under | 75,001-125,000 |
Length of coverage | 6 years or 100,000 miles, whichever comes first | 5 years or 100,000 miles, whichever comes first | 3 years or 36,000 miles, whichever comes first |
24-hour roadside assistance | Yes | Yes | Yes |
Reimbursement for repair costs after manufacturer’s warranty expires | Yes | Yes | Yes |
Towing | Yes | Yes | Yes |
Rental car reimbursement | Yes | Yes | Yes |
Pricing for standard vehicles | $1,245 | $1,745 | $1,745 |
Pricing for premium and hybrid vehicles | $1,245 | $2,995 | $2,995 |
Feature | Death | Disability | Involuntary unemployment |
---|---|---|---|
Plan 1 coverage (Premium) | Yes | Yes | Yes |
Plan 2 coverage (Advanced) | Yes | Yes | No |
Plan 3 coverage (Basic) | Yes | No | No |
Maximum total loan balance canceled | $70,000 | $24,000 | $15,000 |
Maximum monthly loan balance canceled | N/A | $1,000 | $1,000 |
Maximum number of payments canceled per occurrence | N/A | 6 | 12 |
Getting an auto loan from PenFed is easy, and you can do it without leaving your seat. On its website, choose between a new or used vehicle loan. Then, complete a quick quiz about where you purchased your vehicle, the total amount you’d like to borrow, the term length you’d like, and some information about yourself, including your name, email, mobile phone number, address, birthday, Social Security number, employment status, income, and more.
You can go through this process without having to get a PenFed membership first, so it’s quick and seamless.
To compare the best new car loan providers, we looked at information from the providers/aggregators directly, as well as third-party ratings from the Better Business Bureau and Trustpilot, which aggregates customer reviews from across the internet. The company information we analyzed included the following:
We analyzed private-party auto financing, auto lender aggregation services, and companies that offer a car-buying service. Exact loan offers will depend on your vehicle, credit report, and other factors. We prefer lenders with low APRs, flexible terms, and a wide range of loan amounts.
With Interest rates as high as they are since the pandemic, a good rate on a new car loan is around 5 percent for a 36 month term. Below we’ll look at some good APRs based on various length terms.
Term | 36 months | 37-60 months | 61-72 months | 73-84 months | 85-96 months |
---|---|---|---|---|---|
New vehicle APR | 5.24% | 5.39% | 5.64% | 6.84% | 7.24% |
In general, it’s better to get an auto loan from a bank than a dealership. Shop around for the lowest APRs from different auto loan providers. While getting an auto loan from a dealership is more convenient, finance charges can be high, and advertised low interest rates may only apply to those with good credit scores.
Whether or not it’s smart to pay off a car loan early depends on your loan provider. Some lenders will charge you fees for prepayment. However, if your lender doesn’t have a prepayment penalty, it is smart to pay off a car loan early to avoid paying more interest. Learn more about what to know about accelerated car loans.
With a 750 credit score, you can get a car interest rate of around 5 percent for a new vehicle, according to Experian data.
State of the Automotive Finance Market Q4 2023. Experian. (2024, Feb).
https://www.experian.com/content/dam/noindex/na/us/automotive/finance-trends/experian-safm-q4-2023.pdf
Business Profile: Auto Credit Express. Better Business Bureau. (2024).
https://www.bbb.org/us/mi/auburn-hills/profile/loans/auto-credit-express-inc-0332-32019681
Military Auto Loans. Auto Credit Express. (2024).
https://www.autocreditexpress.com/leasing-financing/auto-loans/military-auto-loans/
Business Profile: Bank of America. Better Business Bureau. (2024).
https://www.bbb.org/us/nc/charlotte/profile/bank/bank-of-america-0473-100421
PenFed Credit Union. Trustpilot. (2024).
https://www.trustpilot.com/review/penfed.org
Auto Refinance Loan Benefits. PenFed Credit Union. (2024).
https://www.penfed.org/auto/refinance
Car Depreciation: How Much Value Does A Car Lose Per Year? Carfax. (2021, Feb 3).
https://www.carfax.com/blog/car-depreciation