*All APR figures last updated on 5/25/2022 – please check partner sites for latest details. Your rate may vary based on credit score, credit history, and loan term.
In this article, we’ll talk about the top five providers with the best auto loan rates and go over how you can find good financing terms. We will also detail the best auto loan companies with the best new and used car loan rates available. When shopping around for auto loans, comparing prequalification offers from several top lenders is a good idea. Below are some important things to know about the best car loan rates:
PenFed Credit Union offers the lowest auto loan annual percentage rates overall.
The best used car loan rates start at 2.49% while the best new car loan rate is 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.
Best Auto Loan Rates Providers
Based on our research, PenFed Credit Union currently offers the best annual percentage rate (APR) at 2.09%, and myAutoloan.com and Consumers Credit Union also generally offer some of the lowest rates and financing terms. In the table below are five top providers with some of the best auto loan rates in 2022.
Lowest Auto Loan Rates
Lender With Best Auto Loan Rates
Minimum Credit Score
PenFed Credit Union
36 to 84 months
$500 to $100,000
24 to 84 months
$8,000 to $99,000
Consumers Credit Union
0 to 88 months
$5,000 to $75,000
24 to 84 months
$5,000 to $100,000
Bank of America
48 to 72 months
$7,500 to $100,000
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.
Best Auto Loan Companies
Below is a breakdown of the best auto loan companies with the lowest rates. PenFed Credit Union tops the list with the best new car loan rates, but if you are looking for used car loans or refinancing, other companies may suit you better. To help you find the best auto loan rates for you, we have outlined new and used car loan APRs, pros and cons, and details about each company’s loan services.
#1 PenFed Credit Union: Best New Car Loan 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 for new cars 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: Best Used Car Loan Rates
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:
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: Best Credit Union
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:
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 Bank Interest Rates
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 Is A Good Auto Loan Interest Rate?
A good auto loan interest rate is usually 4% or lower, but typically the best auto loan rates are for new cars. 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 lower, you know you’re getting a fair rate on your car loan.
Good Car Loan Rates
For an auto loan term of 48 months, good new car loan rates from credit unions are 2.67% or lower while good new car loan rates from banks are 4.60% or lower. New car loan rates tend to be lower on average, but loan rates for used cars are slightly higher. To put this in perspective, below is a table comparing new and used auto loan rates with different terms.
Average New And Used Car Loan Rates
New or Used Vehicle Loan
Average Credit Union APR
Average Bank APR
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.
Best Car Loan Rates: Conclusion
You can find the best auto loan rates for you through banks, credit unions, online lenders, and dealers. There are also a variety of factors that affect your interest rates and many methods for you to get the lowest rates possible. We encourage you to look around and compare your options to find the best auto loan for you.
Best Auto Loan Rates: Compare Top Lenders
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. Below you can start comparing the best auto loan rates available.
Best Auto Loan Rate: FAQ
Below are some frequently asked questions and answers about the best auto loan rates:
Who has the best auto loan rates?
Currently, Penfed Credit Union has the best auto loan rates overall for used cars while myAutoloan has the best-used car loan rates available
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.
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.
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.
What are the lowest auto loan rates?
Currently, the best auto loan rates for new vehicles are slightly above 2%. Lenders compete with one another by offering low-interest rates to who they consider dependable borrowers.
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 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.
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.