best auto loan rates

Best Auto Loan Rates

Our research team pulled together the top 5 companies with the best auto loan rates so you can find the best auto loan option for you. We also have broken down the average rates for both used and new cars so you know what the best car loan rates are. Below are a few notes to remember when you are looking for a car loan.

  • PenFed Credit Union tops the list with the lowest annual percentage rates starting at 2.09%.
  • Shorter financing terms of 24 to 36 months generally come with the lowest interest rates.
  • Shop around and get quotes from multiple lenders to find the best auto loan rates for you.

Affiliate disclosure: Automoblog and its partners may be compensated when you purchase the products below.

Compare Auto Loan Rates

Compare which options fit your budget, credit score, and term length below.

Loan Term
All
  • All
  • 48 to 84 months
  • 24 to 84 months
  • 36 to 84 months
  • 36 to 72 months
  • 12 to 72 months
Min. Credit Score
All
  • All
  • 300
  • 500
  • 560
  • 575
  • 580
Brand
Min Cred Score
Min Rate Term
Min APR*
Features
Min
Cred Score
580
Min
Rate Term
48 to 84 months
Min
APR*
2.25%
  • Excellent customer ratings
  • Low rates for good credit customers
  • Strong industry reputation
Min
Cred Score
575
Min
Rate Term
24 to 84 months
Min
APR*
2.49%
  • Below-average credit scores accepted
  • Great interest rates
  • Smooth and easy online experience
Min
Cred Score
560
Min
Rate Term
36 to 84 months
Min
APR*
1.99%
  • Average monthly savings of $145
  • Online Application
  • Browse loan options found specifically for you
Min
Cred Score
300
Min
Rate Term
36 to 72 months
Min
APR*
3.99%
  • Great for customers with limited/no credit
  • Offers special military rates
  • A+ BBB rating
Min
Cred Score
300
Min
Rate Term
36 to 72 months
Min
APR*
3.99%
  • Great for customers with limited/no credit
  • Offers special military rates
  • A+ BBB rating
Min
Cred Score
575
Min
Rate Term
24 to 84 months
Min
APR*
1.99%
  • Below-average credit scores accepted
  • Great interest rates
  • Smooth and easy online experience
Min
Cred Score
500
Min
Rate Term
12 to 72 months
Min
APR*
1.99%
  • Specializes in auto refinancing
  • A+ BBB Rating
  • No application fee
Min
Cred Score
575
Min
Rate Term
24 to 84 months
Min
APR*
2.24%
  • Below-average credit scores
  • Great interest rates
  • Smooth and easy online experience
Min
Cred Score
580
Min
Rate Term
36 to 72 months
Min
APR*
1.99%
  • Average savings of $100/month
  • Secure, fully online platform
  • Refinancing available for cars, trucks, or SUVs

Lenders compete with one another by offering low interest rates to who they consider dependable borrowers. Currently, the best auto loan rates for new vehicles are slightly above 2%. Many providers offer rates like this, including credit unions, banks, and online lenders.

In this article, we’ll talk about the five best providers for low auto loan rates and go over how you can find good financing terms. When shopping around for auto loans, it’s a good idea to compare prequalification offers from several top lenders.

5 Providers With the Best Auto Loan Rates

In the table below are five top providers with some of the best auto loan rates in 2022. Based on our research, PenFed Credit Union currently offers the lowest annual percentage rate (APR) at 2.09%, and myAutoloan.com and Consumers Credit Union also generally offer some of the best rates and financing terms.

Be aware that the lowest rates are available for borrowers with the best credit. In other words, the minimum credit score is the minimum needed to qualify for auto financing from a lender, not to get the lowest interest rate. Also, interest rates change frequently. The information presented here is current as of the time of publication.

Lender With Best Auto Loan Rates Lowest APR Loan Terms Loan Amounts Minimum
Credit Score
PenFed Credit Union 2.09% 36 to 84 months $500 to $100,000 610
myAutoloan.com 2.24% 24 to 84 months $8,000 to $99,000 575
Consumers Credit Union 2.74% 0 to 88 months $5,000 to $75,000 Good
LightStream 3.99% 24 to 84 months $5,000 to $100,000 660
Bank of America 3.69% 48 to 72 months $7,500 to $100,000 Not specified

#1 PenFed Credit Union: Lowest Interest Rates

New Car Loan Starting APR: 2.09%

Used Car Loan Starting APR: 3.29%

PenFed Credit Union has one of the lowest annual percentage rates of any bank, credit union, or loan company at this time. The advertised starting rate is 2.09%, but not just anyone can get rates that low. This rate applies to people who use PenFed’s car buying service to purchase a new vehicle with a 36-month loan term. PenFed Credit Union works with TrueCar to show you vehicles in your area, and the low APR is an incentive to use this shopping process.

If you purchase a vehicle without using this buying service, loan rates start at 2.89%. Used car loans start at 3.29% with the buying service and 3.69% otherwise. These are still some of the best auto loan rates compared to other lenders’ rates for new and used vehicle purchases.

PenFed Credit Union requires membership and a $5 deposit. You can become a member through a variety of organizations or simply by expressing interest in joining.

PenFed Credit Union Pros and Cons

Even the best auto loans from PenFed Credit Union come with the benefits and drawbacks below:

PenFed Credit Union Pros PenFed Credit Union Cons
Some of the lowest APRs on the market Requires membership to become eligible
Offers loans as small as $500 APRs are higher without using a car buying service
4.6-star customer service score on Trustpilot Medium or strong credit needed for approval

Most motorists receive exceptional APRs from PenFed Credit Union, as it offers some of the best auto loan rates on the market. Remember that you’ll need to become a member to qualify, and keep in mind that APRs aren’t quite as low unless you use the credit union’s car buying service.

For more details on PenFed Credit Union, head to the company’s website.

#2 myAutoloan.com: Easiest Rate Comparison

New Car Loan Starting APR: 2.24%

Used Car Loan Starting APR: 2.49%

myAutoloan.com is an internet-based lender that has been around since 2003, and it currently has new car loan offers with rates of just 2.24%. The company has a 4.3 out of 5.0-star rating from over 800 customers on Trustpilot and an A+ rating with accreditation from the Better Business Bureau (BBB).

Borrowers need a minimum credit score of 575 to qualify. This is a lower credit score requirement than many other top lenders, making myAutoloan a good option for people with lower scores who need to secure a car loan.

One thing that makes myAutoloan different from most companies is that it’s an online marketplace where you can see rates from multiple lenders at once. It’s always a good idea to do some comparison shopping to find the best auto loan rates, and you can save some time with myAutoloan. Be aware that you need to borrow at least $8,000 when using myAutoloan.

myAutoloan.com Pros and Cons

The following table lists out some of the pros and cons of choosing myAutoloan.com:

myAutoloan.com Pros myAutoloan.com Cons
Competitive starting APRs Minimum loan amount of $8,000
Relatively generous credit approval Marketplace format isn’t for everyone
Extremely easy to compare rates Not available in Hawaii or Alaska

It’s rarely difficult to find some of the best auto loans from myAutoloan, as the site works as an online marketplace. It’s not the place to get a minor car loan, though, as you’ll need to finance at least an $8,000 loan to be eligible.

For more details on myAutoloan.com, head to the company’s website.

#3 Consumers Credit Union: Most Flexible Terms

New Car Loan Starting APR: 2.74%

Used Car Loan Starting APR: 2.99%

Consumers Credit Union is another great option for low rates on auto loans. Based out of Illinois, the credit union offers membership for anyone in the country who can pay a $5 fee and keep at least $5 in a savings account. The credit union has an A+ rating with accreditation from the BBB. Consumers Credit Union’s auto loan products are available for people with good to excellent credit, meaning from the mid-600s and above.

Like PenFed Credit Union, Consumers Credit Union partners with TrueCar to help shoppers find vehicles from across the country. One difference is that buyers can still get the same interest rates whether they shop with TrueCar or not.

At this time, rates start at 2.74% for financing newer vehicles. Consumers Credit Union offers a 0.25% discount on this rate for using autopay and an extra 0.25% discount when that autopay is linked to a Consumers Credit Union account.

Consumers Credit Union Pros and Cons

Below are some of the benefits and downsides of opting for Consumers Credit Union:

Consumers Credit Union Pros Consumers Credit Union Cons
Starting APRs are relatively low Requires good to excellent credit
Flexible loan terms and limits Must become a member to get a loan
Generous autopay discount

Consumers Credit Union can be an excellent choice for drivers who are comfortable with signing up for a credit union. Its competitive starting APRs and flexible loan terms make it a compelling option for anyone who’s looking for the best auto loans available.

For more details on Consumers Credit Union, head to the company’s website.

#4 LightStream: Best Customer Rating

New Car Loan Starting APR: 3.99%

Used Car Loan Starting APR: 3.99%

Founded in 2013, LightStream is the online lending division of Truist Bank. According to the company’s website, it has a 4.9 out of 5.0-star rating based on over 22,000 customer reviews. It also has a rating of A+ with accreditation from the BBB.

LightStream provides loans of all kinds to people with good credit or better. With auto loans, there are no restrictions on the age or mileage of the financed vehicle, which means borrowers have plenty of options. However, the starting loan amount is $5,000.

LightStream auto loans start at 3.99% (rate as of 5/18/2022) for both new and used vehicle loans, and these rates include an autopay discount of 0.5%.

LightStream Pros and Cons

We’ve listed out some of the pros and cons of getting an auto loan from LightStream in the table below:

LightStream Pros LightStream Cons
Backed by the financial strength of Truist Loans must be for $5,000 or more
Good customer service rating Only accepts good to excellent credit
No vehicle age or mileage limits Higher APRs on average

Drivers may be able to find the best auto loans from LightStream if they’re hoping to finance a high-mileage car or one with an older model year. The company’s starting APRs tend to be slightly higher than other options on average.

For more details on LightStream, head to the company’s website.

#5 Bank of America: Best Rates for Bad Credit

New Car Loan Starting APR: 3.69%

Used Car Loan Starting APR: 3.89%

Bank of America offers a new car loan APR of 3.69% to borrowers with excellent credit, while used car rates start at 3.89%. If your looking to refinance your auto loan, the lender’s refinancing rates start at 4.79%. Bank of America Preferred Rewards members can also get an interest rate discount of up to 0.5%. As a national bank, Bank of America works with a huge variety of dealerships across the country, which means you don’t have to limit your options.

Be aware that Bank of America won’t finance vehicles older than 10 years or with more than 125,000 miles on the odometer. It also won’t finance cars under $6,000 in value or alternative vehicles like motorcycles and RVs.

Bank of America Pros and Cons

The major perks and drawbacks of choosing a Bank of America auto loan can be found in the following table:

Bank of America Pros Bank of America Cons
Strong rates for those with bad credit Won’t finance older or low-value cars
Backed by excellent financial strength Somewhat higher APRs
Discounts for certain bank members Doesn’t offer prequalification

The best auto loans from Bank of America come to those with a poor credit score, as the company is relatively generous with these drivers. You may end up paying a slightly higher APR, but your car loan will be backed by the financial strength of a large institution.

For more details on Bank of America, head to the company’s website.

What’s a Good Auto Loan Interest Rate?

So, what is a good car loan rate today? According to the 2022 report from the National Credit Union Administration (NCUA), the average 60-month new car loan from a credit union has an interest rate of 2.78%. From a bank, the average rate is 4.69%. So, if you find these rates or better, you know you’re getting a fair rate on your car loan.

What Is a Good Rate for Used Cars?

Loan rates for used cars are higher than rates for new cars. For a 48-month term, a good used auto loan rate from a bank is 5.03% or lower. A good used car rate from a credit union is 2.84% or lower.

What Is a Good Rate for New Cars?

Rates for new cars tend to be lower than for used cars. For a 60-month term, good new auto loan rates are 4.69% or less from banks and 2.78% or less from credit unions.

Below is a chart with NCUA data for average credit union and bank rates for both new and used vehicles.

New or Used Vehicle Loan Loan Term Average Credit Union APR Average Bank APR
New vehicle 48 months 2.67% 4.60%
New vehicle 60 months 2.78% 4.69%
Used vehicle 36 months 2.73% 4.98%
Used vehicle 48 months 2.84% 5.03%

Which Bank Has the Best Auto Loan Rates?

At this time, Bank of America has its lowest car loan rates starting at 3.69%. You can get competitive rates like this if you purchase a new car and have excellent credit.

Drivers may be able to find a lower APR from other banks that do not advertise their best auto loan rates. That’s why it’s important for motorists to shop around for the best rates available before they choose an auto financing partner.

What Affects Auto Loan Interest Rates?

The rates above are average APRs based on information reported to the NCUA. You may find different rates based on a number of factors, including:

  • Credit score: A low score will require a higher interest rate, and vice versa. Credit score is perhaps the single most important factor that auto lenders use to determine rates.
  • Loan term: Shorter terms typically have lower interest rates. Consider making higher monthly payments to get a shorter-term loan with a lower overall cost.
  • Credit report: Lenders look at your entire credit report, so two people with the exact same score can find different rates based on how their score is calculated.
  • Income: Lenders can have minimum income requirements for borrowers to qualify and also to secure the best auto loan rates.
  • Down payment: A higher down payment not only reduces the total amount of the loan, but it shows that you are committed to purchasing the vehicle, and this can also reduce your interest rate.
  • Interview process: If you impress a loan officer with professionalism and supporting documentation in discussing your financial situation, you may have a better chance of getting the best auto loan rates for your situation.
  • Negotiation: If you get multiple prequalification offers, you can use those when negotiating interest rates from lenders.
  • Autopay: Many lenders offer discounts for making automatic payments from your checking account. Credit unions can also offer a discount if you pay for the loan with an account at that same credit union.

How to Get the Best Auto Loan Rates

There are a few different ways to save money and find the best auto loan rates. Below, we’ll outline some simple ways to reduce your interest rate for a new car, a used vehicle, or a lease buyout.

Remember that you may pay a higher APR if you’re looking to purchase a used car or if you’re hoping to buy a vehicle from a private party. And before you go searching for the best auto loans, make sure that repayment is possible based on your current financial situation.

Raise Your Credit Score

You can do a few things to get a lower interest rate. For example, you can raise your credit score over a few months to a year if you work hard at it. Even 20 or 30 points can move you up a bracket and make a big difference in your auto loan options. You can also make a larger down payment to reduce your APR.

Find a Cosigner

If your credit score isn’t quite as high as you’d like, you can see if a family member or friend with an excellent score can cosign on your loan. You can use their good credit to get the best auto loan rates. If you go this route, make sure you’ll be able to make your monthly loan payments, because if you don’t, both of your credit scores will take a hit.

Buy Used Rather Than New

If saving money is your overall goal, you might look into purchasing a used or certified pre-owned car instead of a new one. A two- or three-year-old model will be significantly cheaper than a brand-new car. Even if your APR is 1 to 2% higher, you can still save money this way.

Consider an Extended Warranty

On a related note, if you purchase an extended auto warranty through a dealership, the cost can often be rolled into your monthly car payment. However, that will increase your loan amount and the total interest you pay. It can be a better idea to purchase a standalone vehicle service contract a bit later on if you want to save money and keep your car protected.

Quickly Find the Best Auto Loan Rates Available

As mentioned, one of the simplest ways to find the best auto loan rates is to shop around. Do this before you get in the room with a loan officer at a car dealership. You can get as many offers as you want, as long as you make sure they only require a soft credit check.

When you’re ready to move forward with an offer, you can go through the full loan application process with the financial institution that gives you the best auto loan rates overall.

FAQ: Best Auto Loan Rates

What is a good interest rate for a 72-month car loan?

A 3.5% to 4% starting interest rate is pretty standard for a 72-month car loan. The best auto loan rates for drivers looking for six-year car financing are generally on the lower end of that range.

Is 2.9% APR a good rate?

Yes, 2.9% APR is a good rate. While the best auto loan rates for new cars can sometimes be lower than this, you’re likely receiving a competitive APR.

What is a good interest rate for a car right now?

A good APR for a car right now is anything less than 4%. Remember that the best auto loan rates are typically for new cars, so you may receive a higher number if you’re looking to finance a used model.

How can I get a low interest rate on a car?

You can get a low interest rate on a car by finding a cosigner, boosting your credit score through paying off credit card debt, or making a larger down payment at the start.

Is it smart to pay off a car loan early?

Yes, it can be a smart move to pay off a car loan early so that you can save on interest. However, be sure to check whether there are prepayment penalties for paying off your car early, as that could wipe away your potential savings.

Can a personal loan be used for a car?

Yes, personal loans can be used to finance a car. Most drivers opt for the best auto loans instead because they usually come with lower APRs.