Best Auto Loan Rates in January 2026
See today’s best auto loans — new car rates start at 3.39%
- Auto loan rates vary widely based on your credit score, loan term and the vehicle you choose.
- New car loans generally have lower rates than used car loans because used cars are harder to value, so they are riskier for lenders.
- Getting preapproved before shopping can help you understand your likely rate and avoid dealer markups.
| Lender | Starting APR | Term | Amount | |
|---|---|---|---|---|
|
3.39% | 36 to 84 months | Up to $150k | |
|
3.50% | 12 to 84 months | Up to $100k | |
|
4.65% | 24 to 96 months |
$2.5k – $100k |
|
|
4.99% (with discounts) | Up to 84 months | Up to 130% of the car’s value | |
|
5.11% | 24 to 84 months | Starting at $4k | |
|
5.24% | 24 to 72 months |
$500 – $100k |
|
|
5.34% | 48 to 72 months | Starting at $7.5k | |
|
6.24% (with autopay) | 24 to 84 months |
$5k – $100k |
|
|
7.44% (with autopay) | 12 to 84 months |
$5k – $100k |
|
|
Not specified | 12 to 84 months |
$4k – $750k |
Learn more about how we made our picks for the best auto loans.
Best for: Rate discounts for using a car-buying service – PenFed Credit Union
- Starting APR
- 3.39%
- Free car-buying service helps you compare used and new cars
- Cheaper rates if you use car-buying service
- Can finance up to 25% more than what the car is worth for cash in your pocket
- Required to join credit union (but membership is open to all)
- Must use car-buying service to get PenFed’s lowest rates
- Can only get your loan as a check in the mail
PenFed offers a rate discount if you use its free car-buying service, powered by TrueCar. Rates for new cars purchased through PenFed’s car-buying service start at 3.39%, and used car rates start at 4.34%.
Financing a car through PenFed’s car-buying service will give you access to one of the lowest starting car loan rates available now.
But even if you don’t use its car-buying service, rates are still competitive. If you don’t use the service, new car loan rates start at 4.19% and used car loans start at 4.79%.
Like with any credit union auto loan, PenFed requires you to join before you can borrow. Still, it’s easy to join, as membership is open to everyone.
To qualify for a PenFed Credit Union loan, you have to meet the following requirements:
- Membership: PenFed membership (anyone can join)
- Administrative: Open a PenFed savings account with $5 deposit (may need to submit documents to verify your identity and income)
Best for: Cheap auto loan rates on short loans – Southeast Financial Credit Union
- Starting APR
- 3.50%
- Competitive rates for short loan terms
- Recent college grads may be eligible for a car loan even if they have no credit
- Can apply to skip a payment if you need extra time (but it costs $60)
- Have to become a member to borrow (but it’s easy to join)
- Can’t check rates without hurting your credit
- Not many branch locations
Credit union car loans tend to offer the lowest rates, and Southeast Financial Credit Union (SFCU) is no exception. It’s frequently at the top of our list of the best car loan rates.
SFCU’s 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 3.50% on a 12-month term.
But if you prefer to do business in person, SFCU might not be the best choice. There are only 13 physical branches, mostly in Tennessee but also in Kentucky and Mississippi. You don’t have to live in these states, though. You can become a member and apply for your car loan online.
You must have a credit score of at least 600 to qualify for an auto loan. 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 Tennessee, Kentucky or Mississippi
Best for: Bad credit car loans – Autopay
- Starting APR
- 4.65%
- Accepts less-than-perfect credit
- Able to check rates without hurting score
- Works with a large network of lenders
- Must prequalify to see what kind of rates Autopay offers
- No mobile app
It’s not always easy to find an auto loan when you have bad credit — however, Autopay works with borrowers with as low as 580. You can also protect your credit score by prequalifying for Autopay. Not all lenders and marketplaces offer this option.
Autopay is an auto loan marketplace. It lets you shop its network of lenders for free, and with no impact to your credit score. Some of Autopay’s partners work with lower credit scores, but only the most well-qualified borrowers will get Autopay’s starting APR of 4.65%.
Autopay connects borrowers to partner lenders and financial institutions. These partners all have different eligibility requirements.
To use the marketplace, you and the vehicle you’re financing need to meet the requirements below:
- Credit score: 580+
- Income: At least $2,500 per month
- Vehicle restrictions: Car must be less than 10 years old and have no more than 150,000 miles
- Administrative: You must provide your driver’s license, insurance, proof of income and residence and a payoff letter if you’re refinancing
Best for: Used car loans overall – Digital Federal Credit Union (DCU)
- Starting APR (with discounts)
- 4.99%
- Same rates for used and new cars
- Can borrow up to 30% more than the vehicle’s value
- 0.25% rate discount for fully electric cars
- Must join credit union (but it’s easy to become a member)
- Can’t check rates without hurting your credit
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’s worth with a DCU car loan. In this case, any money left over after you finance your car goes in your pocket. This could help you cover registration and insurance costs.
Like other credit unions, though, you’ll have to become a member to borrow. You’ll also need to take a hard credit pull to check your eligibility — you won’t be able to prequalify.
You must be a DCU member to take out a loan. To join, you must open a DCU savings account with a deposit of at least $5 and meet one of the following requirements:
- Live, work, worship or go to school in certain Massachusetts communities
- Work for a participating employer
- Join a participating association (annual dues between $10 and $120)
Best for: Car loan overall – Capital One
- Starting APR
- 5.11%
- Only need a credit score of at least 500 to qualify
- Can get prequalified or preapproved
- Auto Navigator tool can help you find your next car and stick to your budget
- Can only buy from certain dealerships
- No customer service on Sundays
- No interest rate discounts
Capital Oneoffers car loans to both good and bad-credit borrowers, and its Auto Navigator tool can make it easier to find a car for sale near you. Capital One also has branches and cafés, in case an in-person element to borrowing is important to you.
Use Capital One’s Auto Navigator tool to prequalify for a car loan and find your car all at once. Because prequalifying is a soft credit check, it won’t hurt your credit to browse.
That said, Capital One won’t finance a vehicle purchase from just anywhere — you’ll have to buy from a Capital One partner dealer.
You could be eligible for a car loan through Capital One as long as you have a credit score of at least 500. You can prequalify on Capital One’s website to get an idea of where you stand.
Capital One also has vehicle eligibility requirements. To be eligible for financing, the car needs to:
- Be a model year 10 years or newer
- Have fewer than 120,000 miles
- Be purchased at a participating dealership
- Be worth at least $4,000
- Have a monthly income of at least $1,500
Best for: Bad credit used car loans – CarMax
- Starting APR
- 5.24%
- Can buy a car online and get it delivered to your house or pick it up at a store
- You have up to 10 days to decide whether you want to keep the car
- Comes with a 90-day, 4,000 mile limited warranty
- No minimum credit score requirement
- Can only use CarMax loans to buy CarMax cars
- Must live within a select market and within 60 miles of a store to qualify for home delivery
- Test drives aren’t allowed on home deliveries
- Car prices aren’t negotiable
Buying a car online can be scary, but CarMax’s 10-day guarantee might put you at ease. You have up to 10 days to return the car to CarMax if it’s not a good match. You’ll just have to bring it back in the same condition it was in when you bought it. Plus, every CarMax car comes with a 90-day, 4,000-mile warranty on your car’s major components.
CarMax has a used car website in addition to brick-and-mortar stores. You can buy a car online and, as long as you live close enough, get your car delivered to your door. If you want to test drive it before buying, though, you’ll have to go to the dealer.
CarMax doesn’t have a minimum credit score requirement, but you may need to provide documents like proof of income and proof of residency.
You can also only get a CarMax loan if you’re buying from CarMax. CarMax does business in 41 states. There are no CarMax stores in:
- Alaska
- District of Columbia
- Hawaii
- Montana
- North Dakota
- South Dakota
- Vermont
- West Virginia
- Wyoming
Best for: Borrowers who want a full-service bank experience – Bank of America
- Starting APR
- 5.34%
- Mobile-friendly application
- Don’t have to be a Bank of America customer to be eligible
- No loan documentation fees
- Offers rate discounts for eligible members
- Rate discounts require high BoA bank balances, and you must apply directly through BoA (not a dealership)
- Can’t buy from an independent dealer or private party
- A cheaper used car might be off the table, since you have to take out a loan for at least $7,500
- Can’t prequalify for an auto loan unless you have a Bank of America login
Bank of America(BoA) could make sense for your next auto loan if you prefer banking at a big institution with a large physical footprint. And if you keep an eligible balance in your Bank of America and/or Merrill investment accounts, you could qualify for a rate discount on a new auto loan.
Auto financing from a big bank can have its perks. Compared to small, regional banks, large banks tend to have more of a digital presence. For example, Bank of America has an auto loan application that’s specifically designed for mobile. It also offers car loans nationwide.
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’ll need to have an eligible Bank of America account with a starting balance of $20,000. You also can’t get your Bank of America auto loan through a dealer if you want this discount — instead, you have to apply with Bank of America directly.
To get a Bank of America auto loan, the car you’re buying needs to:
- 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
Best for: A quick and easy car loan experience – LightStream
- Starting APR (with autopay)
- 6.24%
- Could get your loan the same day that you apply
- No restrictions on year, make, model or mileage
- Does not require a down payment
- Don’t need to have a specific vehicle in mind when you apply
- Must have good to excellent credit to qualify
- Can’t check rates without hurting your credit
- Higher rates than most traditional auto loans, since you aren’t using your car as collateral
As long as LightStream approves you and you complete the necessary steps by 2:30 p.m. Eastern time on a business day, you could get your money on the same day that you applied. Plus, LightStream doesn’t require appraisals and doesn’t have any vehicle restrictions. In short, the LightStream’s auto loan process is easier than that of traditional lenders.
LightStream auto loans are unsecured — that means it doesn’t use your car as collateral, as is the case with a traditional auto loan. However, LightStream’s rates are a little higher than others on this list. (In contrast, collateral loans typically come with cheaper rates because they’re less risky for the lender.)
LightStream doesn’t specify its exact credit score requirements, but you’ll need to have good to excellent credit to qualify. Most of the applicants that LightStream approves have the following in common:
- At least five years of on-time payments under a variety of accounts (e.g., credit cards or auto loans)
- Stable income and the ability to handle paying their current debt obligations
- Savings, whether in a bank account, investment account or retirement account
Best for: Private-party car loans – PNC Bank
- Starting APR (with autopay)
- 7.44%
- May give you extra time to pay or allow you to make partial payments if you’re experiencing a financial hardship
- Car doesn’t have to be fully paid off by the current owner
- Rate discount for autopay through a PNC checking account
- Can only apply for a private-party auto loan in person at a branch
- Not available in all states
- Must be buying a car that’s worth at least $5,000
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 Bank offers several types of auto loans, including private-party car loans.
With PNC Bank, 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.
To get a car loan from PNC, you have to meet the following criteria:
- Administrative: PNC Bank doesn’t offer prequalification. If you want to check rates, you’ll have to take a hard credit hit.
- Application process: You can formally apply online for most of PNC’s auto loans, but you need to go to a branch to get a private-party auto loan from PNC. PNC currently has branches in select states.
- Car requirements: Model age 2017 through 2026 and maximum of 80,000 to 100,000 miles
- Membership: You don’t need to be a PNC customer to get a loan.
Best for: Dealerships in the Chase network – Chase Bank
- Starting APR
- Not specified
- Can check rates without hurting your credit
- Sends your loan approval directly to the dealer on your behalf
- Chase Bank Private Client members get a 0.25% rate discount
- Doesn’t require a down payment
- Can only be used at partner dealerships
- Impossible to know what rates Chase Bank offers without prequalifying
- Need to know what car you want to buy when applying
Chase Bank can make it easy to buy a car from a partner lender near you — just get prequalified online. It’ll then send your prequalification offer directly to the dealer, so you won’t have to mess with paperwork.
Unfortunately, you can’t use Chase at all car dealers — you’ll have to purchase within the Chase network. The good news is that Chase partners with thousands of dealers countrywide. But because it doesn’t advertise its rates, you’ll also need to prequalify to see what APRs it offers.
To get auto financing with Chase, you have to buy your car from a partner dealer. For the car to be eligible, it needs to:
- Be less than 10 years old (or less than five years old, if a Tesla)
- Have less than 120,000 miles
- Not be a commercial vehicle
- Not have a branded or salvaged title
- Not be used for ridesharing
Notably, you won’t need to be a current Chase customer to get an auto loan.
Average auto loan APRs by credit score
Your credit score has a huge hand in the average annual percentage rates (APRs) you’ll be offered. To see what a good auto loan rate is right now, here are the average APRs offered on the LendingTree marketplace.
| Credit score range | Average new car APR | Average used car APR |
|---|---|---|
| Excellent (800 and above) | 7.33% | 8.93% |
| Very good (740-799) | 7.48% | 8.33% |
| Good (670-739) | 9.13% | 11.75% |
| Fair (580-669) | 19.94% | 22.21% |
| Poor (Under 580) | 22.66% | 24.67% |
Not sure where you stand? Check your credit score for free with LendingTree Spring. We’ll also give you personalized recommendations on how you can improve your credit score — and qualify for lower rates.
Estimate your monthly car payment
About 5% of Americans with auto loans are delinquent (or late) on at least one auto loan, according to a LendingTree survey. Calculate your monthly car payment while shopping for your car to avoid a financial hiccup. Having the right tools can make planning feel a little less overwhelming.
How LendingTree works to get you the cheapest auto loan rates
You could save an average of $2,346 on your car loan by using the LendingTree marketplace to shop for loans and then choosing your cheapest offer. Fill out one form and get lenders from the country’s largest network to compete for your business.
Tell us what you need
Take two minutes to tell us who you are and how much money you need for your vehicle — we’ll take care of the rest. It’s free, simple and secure.
Shop your offers
We’ll send you offers from up to five trusted lenders. Compare your offers side by side to see which one will save you the most money.
Get your money
Finalize your loan with your lender, and you’ll be on the road in no time. — you could see money in your account in as soon as 24 hours.
Understanding auto loans and interest rates
Common auto loan requirements
-
Credit score
It usually takes good credit (670+) for an affordable car loan. It’s possible to qualify with a lower score, but rates will be higher. -
Credit history
Auto loan lenders often like to see at least two years of positive credit history, preferably one that includes a past auto loan. -
Debt-to-income ratio
Debt-to-income (DTI) ratio measures how much you earn compared to your current level of debt, like credit card debt, mortgage/rent and auto loan debt. The best rates usually require a DTI of 35% or less, but some lenders accept 46% to 50%. -
Loan-to-value ratio
Auto loan lenders generally prefer a loan-to-value (LTV) ratio of 80% or less. LTV compares how much you’re borrowing to the actual cash value of the vehicle you’re financing. Higher LTVs generally mean higher auto loan rates. -
Paperwork
If you are financing through the dealer, bring your government-issued ID and an insurance declarations page showing full coverage. Some dealers may require proof of income or residency, so you may want to call ahead to avoid multiple trips.
Car loan terminology
-
APR
An annual percentage rate (APR) measures the total cost of your loan, including interest and fees. The lower your APR, the cheaper your loan. -
Loan amount
Most auto loan amounts start at several thousand dollars. If you want to finance a cheaper used car, make sure the lender’s loan amounts fit your needs. -
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. Long car loans typically have lower monthly payments, but you will pay more total interest. -
Doc fees
Doc fees are intended to cover the costs the dealership or lender incurs for filing paperwork. While you can sometimes negotiate dealer fees, you’ll often have better luck simply choosing a lender that charges lower fees to reduce your overall costs. -
Dealer reserve
Dealer reserve applies to indirect auto loans. When a dealer shops for financing on your behalf, lenders provide the dealer with a “buy rate.” The dealer can then mark up that rate to earn a profit for the dealership. -
Well-qualified buyers
A well-qualified buyer is someone who qualifies for the best special financing deals on captive auto loans. There is no strict definition of a well-qualified buyer, but it usually requires a 740+ credit score, stable income and a DTI below 35%.
Why car loan rates vary
-
Your credit history and credit score
If your credit score is 669 or below and you have little to no credit history, expect higher rates. -
Used car loans vs. new car loans
Used car loans usually carry higher rates than new car loans. Used car loans are riskier for dealers because used cars are harder to value and don’t depreciate in value as predictably as brand-new cars. -
Long loan terms vs. short loan terms
Longer loan terms typically have lower monthly payments since you have more time to spread your balance across. In return, rates are higher since you have more time to fall behind on car payments. -
Down payment vs. no money down
Making a down payment reduces your LTV which in turn, can bring down your car loan rate. The 20/4/10 car-buying rule says you should make a down payment of at least 20%. -
Lender variability
Every auto loan lender has its own way of calculating rates, not unlike car insurance companies. Shopping around can ensure you get the best rate possible.
Comparing types of auto loans
With so many different types of car loans, it can be hard to know where to start. The table below can help you compare your auto financing options
| Type of auto loan | What it is | What it’s good for | What’s the catch |
|---|---|---|---|
| Captive financing | Financing straight from the car’s manufacturer (like Toyota Motor Credit) | 0% APR, cash rebates and other special offers; can be easier to get than a direct lender auto loan | Usually need excellent credit to qualify for the best deals; special financing only applies to certain vehicles |
| Dealership financing | Dealership finds your loan through its partner network of lenders | Easier shopping experience; could get access to financing companies only available through a dealer | Possible marked-up APR due to dealer reserve; no way to guarantee dealer picked the best loan |
| Direct lender auto loans | Auto loans from a bank, credit union or online lender | Discounts for current banking customers; straightforward experience | Without LendingTree, comparing offers often requires multiple applications |
| Buy here, pay here (BHPH) financing | An auto loan from the dealership itself | Easier requirements for car buyers who can’t get a traditional bad credit auto loan | Rates and fees are very high; may be forced to buy an older car; some BHPH dealerships require GPS monitoring |
How to get the lowest auto loan rates
According to a LendingTree study, improving your credit score from fair (580-669) to very good (740-799) could save you more than $2,316 on your auto loan over time. But improving your credit score isn’t the only way to get a better car loan rate. You could also:
-
Buy a car that qualifies for special financing
If you’re open to captive financing, then only shop for years, makes and models that have a special financing offer. -
Use a car-buying service
Your current bank or credit union might offer a car-buying service and discount. -
Buy during the holidays
Car manufacturers often run special financing deals at the end of the year and during the holidays, so you could try to time your buy. -
Use a loan comparison service
With LendingTree, you can compare auto loans from up to five lenders, and comparison is key to finding the lowest rates. Plus, nearly 9 of 10 LendingTree users get at least one auto loan offer. -
Get preapproved
Get a preapproved car loan and ask the dealer if they can do better. The dealer might be motivated to get you a cheaper rate in order to sell you a car.
Prequalification is often the first step when shopping for a car loan. It doesn’t hurt your credit and can help you decide which lenders are worth getting preapproved for.
Preapproval is as close to a car loan you can get without actually finalizing your offer. It provides more accurate rates, but requires a hard credit pull. Get your preapprovals done within 14 days to minimize damage to your credit.
Avoid car-buying mistakes with our expert insights
The most common mistake when buying a car is saying yes to a monthly payment. When you’re talking about money, do one thing at a time.
First, get an agreement on the price of the car you want, then the price for your trade-in — if you have one — and, finally, the rate of your car loan.
If you agree to a monthly price first, the dealer will do everything to keep near that payment while increasing their bottom line. They could up your APR, up the length of your loan or try to slip in things like an extended warranty.
According to Kelley Blue Book (KBB), car buyers can expect to pay up to $6,000 more for brand-new vehicles under $40,000. Currently, there is a 25% tariff on cars built outside of the United States, although this varies based on what country the car was built.
Car parts are also subject to tariffs, so even domestic brands are impacted. There are no vehicles that are 100% manufactured and assembled in the United States.
Used cars aren’t directly affected by tariffs since they’ve already been imported. However, used cars may have a higher demand as more people skip new cars (and tariffs). This could cause an increase in used vehicle pricing.
What does that mean for you? It’s more important now than ever to make sure that you’re getting a good deal on your car loan. A lower interest rate can help make up for the added expense that tariffs may add to your bottom line.
How we chose our picks for best auto loans
We reviewed 25 auto lenders to determine the overall best 10 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 (like a mobile app), provide reliable customer service and offer unique perks.
According to our systematic rating and review process, the best car loans come from PenFed Credit Union, Southeast Financial Credit Union, Autopay, Digital Federal Credit Union (DCU), PNC Bank , Capital One, CarMax, Bank of America, LightStream and Chase Bank .
LendingTree reviews and fact-checks our top lender picks on a monthly basis.
LendingTree partners with dozens of auto lenders, but partners and non-partners receive equal treatment in our scoring and review process.
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.
- PenFed Credit Union: Rate discounts for using a car-buying service
- Southeast Financial Credit Union: Best for cheap auto loan rates on short-term loans
- Autopay: Best for bad credit auto loans
- Digital Federal Credit Union (DCU): Best used car loans overall
- PNC Bank: Best for private-party auto loans
- Capital One: Best car loan overall
- CarMax: Best for bad credit used car loans
- Bank of America: Best for borrowers who want a full-service bank experience
- LightStream: Best for a quick and easy car loan experience
- Chase Bank: Best for dealerships in the Chase network
If you don’t mind using a TrueCar car-buying service, PenFed is currently offering the lowest auto loan rates of all the lenders we’ve reviewed (3.39% for new cars, and 4.34% for used cars).
If you don’t want to use a car-buying service, Southeast Financial Credit Union may be your next best bet — its rates start at a very competitive 3.50%.
But remember that only the most qualified buyers get the lowest APRs, so your rate may be higher.
You should aim to pick a car loan term of four years or less. Shorter loan terms typically carry the lowest rates, and you’ll pay less overall interest.
A shorter loan term also helps to protect yourself against an upside-down car loan. The longer it takes you to pay off your car, the more time your car has to depreciate.
Use our auto loan calculator to see how different term lengths can impact your monthly payment.
According to LendingTree’s most recent data, the average auto interest rate for a 700 credit score is 9.13% if you’re buying a new car. If you’re buying used, 11.75% is the average.
Even so, lenders don’t just look at your credit score when determining your auto loan rate. They typically include your income, repayment term, credit history and additional factors. Your quoted rate could be higher or lower, depending on your unique situation.
Many people choose a longer loan term because they typically come with a lower monthly payment. That’s because you have more time to spread your balance across.
However, the longer your loan term, the more overall interest you’ll pay. Loans with longer repayment terms also generally have higher rates than shorter ones.
Auto loan rates are usually negotiable, but it depends on where you’re buying your car. Some dealerships, including CarMax, don’t negotiate. But most dealerships are willing to haggle. Consider getting a preapproved car loan and asking the dealer to beat its rate.