Getting a car can feel a lot like going to a circus — for the main act, a car appears in your driveway and money disappears from your wallet.
With an auto loan, you agree to repay a lender over a set term, typically three to six years, in exchange for them paying a dealership (or a private seller) so that you can get a car. You generally pay more than what you borrowed, which equates to profit for the lender. How much more you pay largely depends on your credit score.
– Complete the form: Answer a few simple questions.
– Compare lenders: Get matched with up to five lenders.
– Save money: Find the loan that’s right for you.
When deciding between auto loan offers, look at what the monthly payments mean for your budget and how much you’ll pay for the loan overall. Even if you have a low APR on a long-term auto loan, you could pay more in total interest than you would on a shorter-term loan with a higher APR. Use an auto loan calculator to be sure.
With a higher credit score, less of your paycheck will do a vanishing act. Since the lowest APRs (annual percentage rates) are offered to the borrowers with the highest credit scores, improving your credit score before applying for an auto loan can really be worth the effort.
The difference between the highest and lowest used-car APR in Q2 2022 was nearly 17 percentage points, according to Experian. On a 5-year loan for $25,000, for example, you could save nearly $12,700 over the life of the loan if you applied with a higher credit score.
If you have no credit history or you’ve made some credit mistakes along the way, it’s still possible to get car loans for bad credit. If you’d like to improve your chances of being approved or possibly secure a lower rate, consider adding a cosigner, making a large down payment or both. No matter your score, it’s important to shop around for your auto loan and compare multiple offers.
There are several types of auto loans’, but here is a quick rundown:
When you’re financing a car, you want to find the best auto loan rates available to save money — that’s why we’ve done the legwork for you. We crunched the numbers and analyzed thousands of vehicle loan applications, sorting the most frequently chosen lenders by average APR received, according to credit score. We compared those rates with the companies’ current advertised offers and those of competitors to find the 10 companies offering the lowest rates at this time.
It’s best to apply to a lender directly (a bank, credit union or online lender) and the dealer so you have options and can choose the best car loan for your needs.
We examined closed LendingTree auto loans from H1 2022. We wanted to know: 1) which lenders consumers chose most often, and 2) which ones offered the lowest average APR. We also looked at the advertised starting car loan rates of large, national lenders to compare.
To find the best rates for those with military connections, we looked at rates offered by USAA Bank, Navy Federal Credit Union, Pentagon Federal Credit Union and Randolph-Brooks Federal Credit Union, and chose the one with the lowest advertised APR for a traditional new car loan not including any other discounts that may be available, such as breaks for using a car-buying service.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 5.99% APR with a term of 3 years would result in 36 monthly payments of $304.17. © 2023 Truist Financial Corporation. Truist, LightStream and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.