Looking for an auto loan but don’t know where to start? Your first step is to find and compare the best auto loan rates in the market. Choosing the best auto loan rates ensures that you pay the best possible monthly payments without feeling the pinch on your wallet.
Let’s help you decide by finding the best rates for your dream car. Take a few minutes for this and enjoy the benefits throughout your loan period!
| LENDER | CURRENT APR | TERM | LOAN |
|---|---|---|---|
| Bank of America | Starting at 2.29% | 48 to 72 months | Starting at $7,500 |
| Capital One | Unspecified | 24 to 84 months | Starting at $4,000 |
| Lightstream | 2.49% to 8.99% (with autopay) | 36 to 84 months | $5,000 to $100,000 |
| myAutoLoan | Starting at 1.9% | 24 to 84 months | Starting at $8,000 |
| Carvana | Starting at 3.9% | On Request | On Request |
*As of January 2022
An auto loan is a secured loan that a buyer can take to purchase a vehicle. These are called secured loans because the vehicle is put up as collateral in return for fixed monthly installments, charged at a certain interest rate.
The advantage of auto loans is that if you choose the best auto loan rates, it will help you pay off the loan over a certain period with significantly lesser interest charges. Auto loans also provide an easy application process, financing options, and flexible repayment terms. They can also be taken for purchasing used vehicles.
You must be 18 years old or older and either a U.S. citizen or a resident alien in order to legally apply for car financing in your state of residency (permanent or non-permanent).
You will need to provide the following information when applying for an auto loan:
If you have already picked out a vehicle to purchase, you will also have to furnish the Vehicle Identification Number (VIN), mileage, dealer’s name, and the state in which you want to register it.
Dealerships usually offer higher rates than banks. However, dealership lending is an easy way to secure loans if you have already decided on the vehicle you want to buy.
On the other hand, direct auto loans from banks give more control to the buyer and allow you more flexibility in choosing auto loan rates.
The best course of action would be to ask for a quote from the dealership and, comparing rates, terms and other factors. You can also compare the different rates and car loan monthly payments using an auto loan finance calculator before buying.
Used car auto loan rates are generally higher than those for new cars, because there is more risk attached with it. According to Experian the average auto loan rate is 5.35% for used cars and 3.64% for new cars.
| LOAN | UPTO 36 MONTHS | UPTO 48 MONTHS | UPTO 60 MONTHS | UPTO 72 MONTHS |
|---|---|---|---|---|
| NEW CAR LOAN RATES | 3.84% | 3.87% | 3.86% | 3.64% |
| USED CAR AUTO LOAN RATES | 4.28% | 4.44% | 5.98% | N/A |
*APRs shown are the average minimum rates across lenders
Yes! Often, your credit score has the most significant impact on what rates are offered to you. The better your credit score, the lower auto loan rates you’ll receive. The current loan rates (average) for each credit score are given below.
| CREDIT SCORE | AVERAGE AUTO LOAN RATE (NEW CAR) | AVERAGE AUTO LOAN RATE (USED CAR) |
|---|---|---|
| 781-850 | 2.58% | 3.68% |
| 661-780 | 3.64% | 5.35% |
| 601-660 | 6.32% | 9.77% |
| 501-600 | 9.92% | 15.91% |
*Experian State of Automotive Finance Report
Yes, you can take an auto loan even with a bad credit score, but you will have to deal with higher auto loan interest rates. In addition, you might have to do one of the following to get approved:
The best auto loan interest rates available to you depend a lot on the state you live in, your credit score, your employment history, payment history, and many other factors. However, it’s good to check out several loan providers before zeroing in on your best option.
| BANK OF AMERICA | CAPITAL ONE | LIGHSTREAM | MYAUTOLOAN | CARAVANA | |
|---|---|---|---|---|---|
| Starting Auto Loan Rates | 2.29% | 3.99% | 2.49% (with autopay) | 1.89% | 3.9% |
| Starting Loan Amount | $7500 ($8000 in Minnesota) | $4000 | $50,000 to $100,000 | $8000 | Not available |
| Term Lengths | 48 to 72 months | 24 to 84 months | 36 to 84 months | 24 to 84 months | 36 to 72 months |
| Available In | All 50 States | All States except Hawaii and Alaska | All 50 states | All States except Hawaii and Alaska | All States except Hawaii and Alaska |
| Min Credit Score | Not available | Not available | Not available | 575 | Not available |
| Min Annual Income | Not specified | $18,000-$21,600 | Not specified | $21,600 | $4000 |
| Other conditions | Will only finance your loans if you buy from one of their participating dealerships | Will be able to sanction your loan on the same day you apply. However, you will have to sign up for autopay to get the best benefits. | You can get up to four quotes from multiple lenders through myAutoLoan. However, a poor credit score will not give you many options to choose from. | Does not accept co-signers for financing. |
*As of January 2022
We would advise against taking on auto loans for more than 60 months. While a longer loan term means lower monthly payments, you’ll be paying more in interest in the long run. This is because your car’s value starts to depreciate the moment you buy it and you could end up “upside-down” on your loan – paying more than the car’s worth after a few years. A 72-month long loan term has more than double the interest charges than a 60-month term.
Borrowers with credit scores above 780 can qualify for 0% new auto loan rates.
Auto Loan Refinancing involves applying for a new loan which pays off your current auto loan. You can refinance a loan in the following circumstances.
Refinancing involves applying for a new loan with new auto loan interest rates, a new loan contract, and new loan term. It’s a viable choice if you want to structure your finances in a more coherent manner.
Yes, auto loan refinance rates are generally lower than new auto loan rates. The exact rate depends on your credit score, payment history, the condition of your car, and whether or not you have a co-signer for your loan.
You can easily use Way.com to find and compare auto loan quotes and select rates of your choice. You can also use the Auto Loan Calculator to find your monthly payments or to refinance your car loan in the best way possible.
The auto refinance rates published here are based on the results of comparative research done by Way.com’s data team. We've used a mix of public and internal data to analyze refinance rates across thousands of lenders, credit scores, vehicle types, and all U.S. ZIP codes
The rates shown here are based on a national average of our findings, and may typically vary for each individual depending on your personal financial position and the US state you are in.
However, you can quickly determine where you stand by going through our Auto Refinance form. In just a few steps, find out how much you can save with way.com!