Best Auto Loan Rates in July 2024

Compare car loans from multiple lenders to find the best rate

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Written by Carol Pope | Edited by Amanda Push | Updated June 27, 2024

Southeast Financial Credit Union: Best for short-term car loans

4.50%

12-84 months

Up to $100,000

Pros

  • Competitive rates for short loan terms
  • College grads may be eligible to borrow even if they have no credit
  • Offers Skip-A-Payment program

Cons

  • Have to become a member to borrow
  • No option to prequalify
  • Few brick-and-mortar branches

What to know

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Credit union car loans tend to offer the lowest rates, and Southeast Financial Credit Union (SFCU) is no exception. Its rates are especially low on short-term car loans. If you have excellent credit, you could qualify for an annual percentage rate (APR) as low as 4.50% on a 12-month term.

If you like to do business in person, though, SFCU might not be the best choice. That is, unless you live in central Tennessee. That’s where all of SFCU’s brick-and-mortar branches are located.

How to qualify

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SFCU has a minimum credit score requirement of 600 but doesn’t offer prequalification. You’ll need to agree to a hard credit hit to see if you’re eligible. You also need to join the credit union before you can borrow.

All SFCU members must open a savings account with a deposit of at least $5. To become a member, you must meet one of the requirements below:

  • Make a $5 donation to Autism Tennessee
  • Be a current employee or retiree of a Southeast Financial Select Employee Group
  • Be related to a current SFCU member
  • Live, work, worship or go to school in certain parts of Tenn., Ky., or Miss.

PenFed Credit Union: Best car loan with a car-buying service

4.74%

36-84 months

Up to $150,000

Pros

  • Rate discount for using PenFed’s car-buying service
  • Membership is open to everyone
  • Can finance up to 125% of the car’s worth

Cons

  • Have to join credit union
  • Must buy through car-buying service for lowest rates
  • Sends loan check via mail (direct deposit not available)

What to know

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There’s a lot to like about PenFed’s car-buying service. For one, PenFed will give you a discounted 4.74% APR on your new car loan. The service also runs periodic special offers (such as bonus cash) on select vehicles. And thanks to a partnership with TrueCar, it can help you find your next ride at a price you can afford.

Like with any credit union auto loan, PenFed requires you to join before you can borrow. Also, if you don’t use PenFed’s car-buying service, you can’t get its cheapest rates.

Read our full PenFed auto loan review.

How to qualify

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Some credit unions only extend membership to certain groups (Navy Federal’s military requirement, for instance). That’s not true for PenFed. Although PenFed is short for Pentagon Federal Credit Union, its membership is open to everyone. All you have to do is open an account with a $5 deposit and you can apply for a loan.

Autopay: Best for bad credit car loans

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5.69%

24 - 96 months

$2,500-$100,000

Pros

  • Can qualify with a credit score as low as 550
  • Can compare multiple offers at once
  • Able to check rates without hurting credit

Cons

  • Preapproval is only good for 30 days (some lenders give 90)
  • No mobile app
  • Fees vary by partner

What to know

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Applying for auto financing when you have less-than-perfect credit can be a pain. Autopay is an auto loan marketplace that can make the process easier. Fill out one quick form online and you could have multiple offers to compare, all with no impact to your credit score. Better yet, it works with borrowers with scores as low as 550.

Note that Autopay’s advertised minimum APR won’t apply to you if you have bad credit. Lenders give their lowest rates to those with the highest credit scores. You’ll need to prequalify to see what kind of rates you might get from Autopay’s lending partners.

Read our full Autopay marketplace review.

How to qualify

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Autopay is a loan marketplace that connects borrowers to partner lenders. These partners all have different eligibility requirements. To use the marketplace, you must have a credit score of 550 or better. Your vehicle must be less than 10 years old and have no more than 150,000 miles on it. From there, you can prequalify to see what lenders you might be eligible for.

Digital Federal Credit Union (DCU): Best for used car loans

5.99%

Up to 84 months

Up to 130% of the car’s value

Pros

  • Same APRs for new and used cars
  • Can finance up to 130% of the vehicle’s value
  • Multiple rate discounts available

Cons

  • Must join credit union
  • Customer service not available on Sundays
  • Must take hard credit hit to see if you qualify

What to know

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Most lenders charge a higher APR on used car loans, but not Digital Federal Credit Union (DCU). Whether you’re buying used or new, you can enjoy the same low rate. If you have excellent credit, you might be able to borrow more than what the car is worth. This could help you cover registration and insurance costs.

Like other credit unions, though, you have to become a member to borrow. You must also take a hard credit pull to check your eligibility since you can’t prequalify.

Read our full DCU auto loan review.

How to qualify

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DCU doesn’t specify what credit score it requires for an auto loan. It does provide details about who is eligible for DCU membership. People in the below groups can join DCU:

  • Certain relatives of current DCU members
  • Employees and retirees of participating employers
  • Members of participating organizations
  • Those who live, work, worship or go to school in certain Massachusetts communities
  • People who live in a participating condo association

Bank of America: Best car loan for those who prefer large banks

5.99%

48-72 months

From $7,500

Pros

  • Can apply via mobile app
  • Don’t have to be a Bank of America customer to be eligible
  • No loan documentation fees

Cons

  • APR discounts only for current banking members
  • Cannot get auto financing at independent dealers
  • Cannot finance cheaper used cars due to high minimum loan amount

What to know

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Auto financing from a large bank can have its perks. Compared to small, regional banks, large banks tend to have more digital presence. Case in point — you can apply for an auto loan through Bank of America’s mobile app.

Bank of America auto loans are open to anyone, but only Preferred Rewards members qualify for APR discounts. To be a Preferred Rewards member, you must have an eligible Bank of America personal checking account.

Read our full Bank of America auto loan review.

How to qualify

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Bank of America’s borrower requirements are unclear. It does, however, give some guidelines about the cars eligible to be financed. To get a loan, the car you’re buying must:

  • Be less than 10 years old
  • Have less than 125,000 miles
  • Be worth at least $6,000
  • Be for personal use only
  • Not be a commercial, heavy-duty truck or van
  • Not have a salvage or branded title

Capital One: Best car loan for prime and subprime rates

(4,087)
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(4,087)
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6.49%

36-72 months

From $4,000

Pros

  • Competitive rates, regardless of credit score
  • Low minimum loan amount
  • Auto Navigator tool can make car buying easy

Cons

  • Must go through a partner dealership
  • Live customer support is not available on weekends
  • No interest rate discounts

What to know

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Some lenders specialize in excellent credit, others in bad. Capital One, on the other hand, is open to working with most credit scores. While CapitalOne doesn’t share its minimum credit score requirement, according to LendingTree data, it may approve you with a score as low as 510. And if you have exceptional credit (800+), you could get a competitive rate of 6.49%.

That said, Capital One won’t finance a car from just anywhere — you have to buy from a partner dealer. However, its Auto Navigator tool can help you find your perfect ride from an eligible dealership.

Read our full Capital One auto loan review.

How to qualify

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According to our data, you could be eligible for a car loan through Capital One as long as you have a credit score of at least 510. You can prequalify on Capital One’s website to get an idea of where you stand.

Carvana: Best car loan for an online experience

(1,416)
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(1,416)
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6.85%

36-72 months

From $5,000

Pros

  • Fully online car-buying experience
  • Might deliver car to your home
  • No minimum credit score requirement

Cons

  • Must purchase through Carvana
  • Not available in all states
  • Can't negotiate car prices

What to know

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Carvana’s unique online car-buying experience could be a great choice for the right person. Just hop onto Carvana’s website, find your desired car and apply for financing — all without leaving your home.

Still, not everyone will feel comfortable buying a car online. Carvana has a seven-day satisfaction guarantee, but you can’t check out the car in person before buying. Also, it’s important to know that Carvana has been the target of several lawsuits, namely due to tag and titling issues.

Read our full Carvana financing review.

How to qualify

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Compared to some lenders, Carvana’s eligibility requirements are transparent and easy to meet. To borrow, you must:

  • Be at least 18 (19 in Alabama and Georgia)
  • Have no active bankruptcies
  • Make at least $5,100 a year

PNC Bank: Best for private-party car loans

6.64% (with autopay)

12-84 months

$5,000-$100,000

Pros

  • Hardship assistance program may let you extend your due date by one to three months
  • Fast funding
  • Rate discount for autopay through a PNC checking account

Cons

  • Need to apply at a branch in some cases
  • Only available in 29 states and the District of Columbia
  • No smaller loans

What to know

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Buying a car from a private party instead of a dealership can save you money, but not all lenders fund these types of purchases. PNC might help.

This bank offers several types of loans, including private-party car loans. You might even be able to buy a car that isn’t yet fully paid off. As long as the seller comes with you to your loan closing, PNC can use a portion of your loan to pay off the existing loan. Then, you can transfer ownership.

Read our full PNC auto loan review.

How to qualify

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Compared to some lenders, it’s not that easy to figure out whether you qualify for a PNC auto loan. You can’t prequalify, but you can submit a formal application online. But that’s assuming you’re buying a car from a dealership. If you are getting a private-party car loan, you’ll need to visit a branch. Either way, you don’t need to be a PNC member to borrow.

LightStream: Best for car loans that don’t require collateral

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7.24% (with autopay)

24-84 months

Loan Term Disclosure

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 $25,000 loan at 7.49% APR with a term of 3 years would result in 36 monthly payments of $777.54. © 2024 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.

$5,000-$100,000

Pros

  • Don’t need to use your car as collateral
  • No restrictions on year, make, model or mileage
  • Does not require a down payment

Cons

  • Must have good to excellent credit
  • Can’t prequalify
  • Rates not as competitive as some other lenders

What to know

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Traditional auto loans use your vehicle as collateral. If you don’t make your payments, your lender can repossess your car. Not with LightStream.

This lender offers unsecured loans, which means it doesn’t require collateral. Instead, your eligibility hinges on factors like your credit score, assets and borrowing history.

Thanks to a lack of vehicle restrictions and same-day funding, LightStream auto loans can come with little hassle for those who qualify. Still, expect to pay extra for the convenience. LightStream’s auto loan APRs are a little higher than others on this list.

Read our full LightStream auto loan review.

How to qualify

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LightStream states it only lends to borrowers with good to excellent credit. Below you’ll find some metrics that LightStream says it looks for in approved borrowers:

  • At least five years of credit history, with a diverse mix of accounts
  • Assets such as retirement savings, investment accounts and liquid bank accounts
  • An acceptable DTI ratio
  • A track record of making debt payments on time

Chase Bank: Best car loan for dealership purchases

Not specified

12-84 months

From $4,000

Pros

  • Can get prequalified
  • Low minimum loan amount
  • Don’t have to make a down payment

Cons

  • Can only be used at partner dealerships
  • Impossible to know what rates Chase offers without prequalifying
  • Need to know what car you want to buy when applying

What to know

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Chase Bank offers auto loans at dealerships across the country. So even though you can only use Chase at a partner dealer, you can get prequalified. Not all lenders offer this option. Also, Chase doesn’t always require a down payment.

Unfortunately, Chase doesn’t advertise its rates. You must prequalify to see what APR it might offer you.

Read our full Chase auto loan review.

How to qualify

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Chase doesn’t specify what it’s looking for in its borrowers. It does shed some light on the types of vehicles it will finance. Eligible vehicles must:

  • Be less than 10 years old (or less than five years old, if a Tesla)
  • Have less than 120,000 miles
  • Not be commercial vehicles
  • Not have branded or salvaged titles
  • Not be used for ridesharing

You don’t need to be a current Chase customer to get an auto loan.

Learn more about how we chose the best auto loans.

How does an auto loan work?

On the surface, auto financing is simple. You don’t have to pay in full when you buy a car if you finance. Instead, you’ll use an auto loan. Then, you’ll pay off what you borrowed in monthly payments, plus interest and fees. You may or may not need to pay a down payment, but you probably should (more on that later).

Although you are the registered owner while you’re making loan payments, the car technically belongs to your lienholder. This is the company that gave you your loan.

If you have a secured auto loan (the most common kind), your car serves as collateral. That means your lienholder can — and likely will — repossess your car if you fall too far behind on your payments.

When you’ve paid the loan in full, the lienholder will release the car’s title to you. At that point, it officially becomes your property.

Types of car loans

All auto loans essentially do the same thing — help you pay for a car via monthly payments. Still, you should familiarize yourself with the different types of auto loans so you know which one to shop for.

  • New auto loan: New car loans tend to have the lowest rates. Many banks, credit unions and online lenders offer loans for new cars. In some cases, you could even get a loan from your vehicle’s manufacturer (such as Toyota Motor Credit).
  • Used auto loan: Used auto loans usually have slightly higher rates than new car loans. Also, some lenders have rules about the vehicles they will finance. For instance, some won’t finance a vehicle that is 10 years old or older.
  • Private-party auto loan: Financing a car from a person instead of a dealership requires a private-party auto loan. These loans can be harder to find, but you may have luck searching with banks and credit unions.
  • Auto refinance loan: Refinancing an auto loan means you’re replacing your current loan with a new one (hopefully with better terms). Refinancing can be a good idea if rates have dropped since you bought your car or if you’ve improved your credit score.
  • Lease buyout: Instead of turning in your lease at the end of your contract, you could choose to buy the car with a lease buyout loan.
  • Cash-out refinance loan: A cash-out refinance auto loan is a refinance loan that also lets you borrow cash against your vehicle’s equity. Equity is what you’ve already paid toward your car.

Auto loan pros and cons

Whether you’re looking for the car of your dreams or something to get you from A to B, a loan can help. At the same time, unless you pay off your car loan early, you could be saddled with debt for years. Take a look at the pros and cons before signing on the dotted line.

ProsCons

 Won’t need to come up the entire cost of the car up front to buy it

 Could help you afford a more reliable car

 On-time payments should help your credit score

 Subject to interest and fees

 Won’t technically own the car until you’ve paid it off

 Most financing companies require you to carry comprehensive and collision insurance while you’re making payments

 Late payments will hurt your credit score

How your credit score impacts auto financing rates

Your credit score plays a major role in your auto loan APR. Statistically, borrowers with higher credit scores are less likely to default on their loans. In turn, lenders grant these borrowers lower financing rates to entice their business.

In the table below, you’ll find the average APR for new and used cars in the first quarter of 2024. Notice the spread between super prime and deep subprime borrowers — especially on used car loans.

To illustrate, a super prime borrower would pay $4,560 in total interest on a 60-month $25,000 used car loan. A deep subprime borrower, on the other hand, would pay $16,062.

Car loan rates by credit score

Credit scoreAverage new car APRAverage used car APR
Super prime (781-850)5.38%6.80%
Prime (661-780)6.89%9.04%
Nonprime (601-660)9.62%13.72%
Subprime (501-600)12.85%18.97%
Deep subprime (300-500)15.62%21.57%

Source: Experian’s State of the Automotive Finance Market Q1 2024

Can I get auto financing with bad credit?

The credit score needed to get a car loan varies. Some lenders only work with those with good credit or better. Others don’t have a minimum credit score requirement at all.

If your score is below 661, you might want to explore bad credit car loans. A score of 661 is the cutoff between “prime” and “nonprime,” according to Experian.

Some other ways to boost your chances of approval include:

Adding a cosigner or co-borrower: Adding a cosigner to your auto loan might be what you need for approval. Know, though, that late payments will affect that person’s credit as well as yours.

Making a large down payment: The less you have to borrow, the more likely a lender may be to approve you.

Expert insights on auto loan rates for 2024


Jacob Channel, Senior economist

Auto loan rates may come down as 2024 progresses, but significant declines aren’t guaranteed.” 

If you’re looking for the best rate, Jacob suggests shopping around and getting several offers. One lender might give you a better rate than another, just because they use different criteria when determining how creditworthy you are.

How to get a better auto financing rate

A good interest rate for an auto loan is subjective — it depends on your credit score, the car you’re buying, the amount of your down payment and more. In the first quarter of 2024, the average new car rate was 6.73%. For used cars, the average was 11.91%.

Improving your credit score isn’t the only way to get a better car loan rate. You could also:

Order your credit report

Order your free credit report and check for errors. Disputing credit report errors can give your score a lift. Unfortunately, errors are more common than you might think.

Make a down payment

Not all auto loans require a down payment. Even so, it may be a good idea to make one anyway.

Putting money down takes some of the lender’s risk and transfers it to you. After all, you’ll lose your down payment if the lender repossesses your car. As a result, a down payment can help you secure a better rate.

Consider a shorter loan term

Cars are getting more expensive, so 84-month car loans are increasingly popular. That’s because longer terms usually mean lower monthly payments. However, longer terms also almost always carry higher rates.

Shop during a promotional event

Captive financing is when you get your car loan straight from your car’s manufacturer. Occasionally, these manufacturers offer 0% APR car deals (usually around holidays and the end of the year). There’s a caveat, though — these deals typically only apply to specific vehicles.

How to get an auto loan

Sure, you could let your dealer get a car loan for you. Or, you could follow the steps below — they might help you get the best rate.

  1. Check your credit score. Before shopping for an auto loan, get your free credit score with LendingTree Spring. Knowing your credit score can help you better understand if your offers are competitive. Depending on your situation, you may also want to take some time to improve your credit score before buying. If you do, you might get a cheaper rate.
  2. Come up with a budget. The 20/4/10 car-buying rule is a great way to make sure that you can afford a new car. Following this, you would put down at least 20%, choose a term of four years or less and spend no more than 10% of your monthly income on transportation. You should also use our car affordability calculator so you know what purchase price you can handle. That way, you won’t get your heart set on a ride that will cause financial hardship.
  3. Shop and compare loans. Getting a preapproved car loan from several lenders can give you negotiating power at the dealership. Comparing offers can also help you find the best auto loan rates. As long as you do your loan shopping within 14 to 45 days, only one hard credit hit will count against you.
  4. Apply for your loan. Once you’ve found the car loan that meets your needs, you can apply. You might be able to apply online, but some banks and credit unions will require you to visit a branch. Here, you’ll fill out a series of questions, and you may need to provide documents like a pay stub or utility bill.
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How to compare auto loans

  APR: An APR measures the total cost of your loan, including interest and fees. The lower your APR, the cheaper your loan. The average new car APR for someone with a 750 credit score is 6.89% (according to Experian). A 600 score, on the other hand, averages at 12.85%.

 Loan amount: Unless you’re buying a luxury car, you probably won’t need to worry about maximum loan amounts. But if you want to finance a cheaper used car, not all lenders can accommodate. Most auto loan amounts start at several thousand dollars.

  Financing term: Your financing term is the length of time you have to pay off your loan. Terms between 12 and 84 months are the most common. The longer your term, the lower your monthly payment usually is. On the flip side, a long term could mean more interest over the life of the loan.

  Fees: Buying a car can come with mandatory fees, such as taxes, titling and registration. Some dealer fees are optional, like those associated with protection packages and extended warranties. Always ask for the out-the-door price, and don’t be afraid to turn down options that you aren’t interested in.

  Lender reputation: The Consumer Financial Protection Bureau (CFPB) maintains a database of customer complaints toward lenders. Check it, along with LendingTree lender reviews, to make sure the lender you choose has your best interest in mind.

  Unique features: Outside of cheap rates, think about what is important to you in an auto loan. Perhaps you prefer to pay by using a mobile app. Or maybe you need some help with car shopping and are interested in a car-buying service. Then, seek out lenders that offer those perks.

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How we chose our picks for best auto loans

We reviewed 25 auto lenders to determine the overall best 11 auto loan lenders. To make our list, lenders must offer auto loans with competitive APRs. From there, we prioritized the following factors:

  • Accessibility: We chose lenders with auto loans that are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification, preapproval and application processes.
  • Rates and terms: We prioritize lenders with more competitive starting fixed rates, fewer fees and greater loan options for repayment terms, amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that have self-service payment options (such as a mobile app), provide reliable customer service and offer unique perks.

Not all lenders we reviewed can be found on LendingTree’s loan marketplace, and your offers may or may not include lenders on this list. Our goal is to give you accurate, helpful information so you can find the best auto loan for your unique financial situation.

Frequently asked questions

Generally, the best place to finance a car is with the lender that offers you the lowest rates. The only way to truly know if a lender is giving you the most competitive rate is to shop around.
 

Auto financing rates fluctuate with the market, so the best auto loan is always changing. At the time of this writing, Southeast Financial Credit Union is offering the lowest rates on this list. Its starting APR is 4.50%.

Shorter loan terms typically carry the lowest rates. At the same time, a shorter term can cause a higher monthly payment (since you’ll have less time to spread your balance across). Use our auto loan calculator to see how different term lengths can impact your monthly payment.

It can be, but only if you are positive you can hold up your end of the deal.
 
Taking out an auto loan when you don’t currently have one can improve your credit mix. Your credit mix makes up 10% of your FICO score. Your payment history makes up 35% of your score, so on-time payments can give you a boost.
 
At the same time, if you make late payments, your credit score will likely take a nosedive. And if you take on a loan when you’ve already got a lot of debt, your credit utilization ratio might go up. This can negatively impact your score.

Usually, yes. Along with your credit score, your lender will review things such as your annual income and debt-to-income ratio (DTI). If your debt levels seem to be outpacing your earnings, you will likely have a higher APR (if a lender approves you at all).