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Buying a car can seem impossible if you don't have the cash available, but an auto loan can help you access reliable transportation. An auto loan is secured by a car and lets you pay in fixed monthly payments rather than paying cash upfront.
The best auto loan rates help you to save money over the life of your loan by charging you less interest. These loans should also have an easy application processes, flexible repayment terms, and financing options for either new or used vehicles.
Best Car Loan Rates of 2023
- Best Overall: PenFed Credit Union
- Best Online Auto Loan: LightStream
- Best Bank for Auto Loans: Bank of America
- Best Credit Union for Auto Loans: Consumers Credit Union
- Best for Used Cars: Chase Auto
- Best for Bad Credit: myAutoloan
- Best for Refinance: AUTOPAY
- Best for Fair Credit: Carvana
Best Overall : PenFed Credit Union
- APR range: As low as 4.89%
- Minimum loan amount: $500
- Repayment terms: 36 to 84 months
For a limited time, earn a?$350 cash bonus?when you purchase through the PenFed Car Buying Service with a PenFed auto loan.*
PenFed Credit Union provides some of the best rates available. It also has flexible loan amounts and a number of auto loan options for members. Even though membership is required, which is a disadvantage for some, PenFed makes the requirements to join fairly straightforward.
Offers new, used, and refinance loans
Loan amounts from $500 to $100,000
Provides rate discounts for using its car buying service
Borrow up to 125% on new and used vehicles
High minimum loan amount for longer terms
Excellent credit history required for lowest rates
Membership in the credit union is required
Also known as Pentagon Federal Credit Union, PenFed has been providing financial services since its start in 1935, when it originally served members of the government and military only. These days, it's America's second-largest credit union, with 2.8 million members worldwide, and anyone is welcome to join.
PenFed Credit Union offers some of the lowest rates available. At PenFed, rates for 36-month refinance loans start as low as 4.89%. Deep discounts are available for members who use the credit union's car buying service, with rates starting as low as 4.89% annual percentage rate?(APR) for a new car and 5.54% APR for a used vehicle.
You'll have to become a member of the credit union, but the requirements to join are fairly easy to meet. Car loans from PenFed start as low as $500 and move up to $150,000, a wide range that beats out many of the lenders we surveyed.
The downside to PenFed is that the most flexible loan amounts are only offered on the shortest terms. For example, 36-month new car loans from the lender have a $500 minimum loan amount, while new car loans of 73 to 84 months have a minimum of $20,000. As with most lenders, you'll need excellent credit to get the lowest rates.
*The PenFed Car Buying Service rebate of $350 will apply to new and used purchase loan applications with a qualifying vehicle purchase sourced through the PenFed Car Buying Service. Applications and Car Buying Service dealership match must be received during the promotional period, between 2/1/2023 and 4/30/2023. Dealer originated loans and refinance loans are not eligible for this promotion.?Loan must be currently active and have at least 2 payments posted in order to qualify for the rebate.?The $350 rebate will be deposited to the member share savings account within 60 days of receiving the second payment.?PenFed may discontinue or change the promotion at any time.?Other restrictions may apply.?
Best Online Auto Loan : LightStream
- APR range: 5.99% to 14.24%* with Auto Pay & Excellent Credit
- Minimum loan amount: $5,000
- Repayment terms: 24 to 84 months*
LightStream offers a fully online process for its extensive list of vehicle loan options. It's very transparent about its rates and terms, and it has few restrictions on what kind of car it will finance. However, it scored below average marks in the J.D. Power 2022 U.S. Consumer Lending Satisfaction Study for personal loans.?
Completely online process
AutoPay discount of 0.5%
No restrictions on make, model, or mileage
Offers unsecured loans to borrowers with excellent credit
Online application only
Prefers borrowers with good credit
Lightstream is a division of Truist Bank, which got its start in 1891 as Commercial Travelers' Savings Bank in Atlanta, Georgia, and later became known as Sun Trust. At Lightstream, you'll find a very wide range of consumer loans for everything from horses to homes.
LightStream stands out for its online lending process. Borrowers can apply online, e-sign the loan agreement, and receive funds via direct deposit as soon as the same day.
LightStream also offers a remarkably wide range of auto loan options, including new and used dealer purchases, refinancing, lease buyouts, and classic cars. It even offers unsecured loans for those with excellent credit.
Rates from the lender start as low as 5.99%, which includes a 0.5%-point discount for autopay. The maximum APR on a LightStream car loan is 14.24%.
The downside is that the lowest rates from LightStream are only available to borrowers with excellent credit. That's not unusual, but it means that this isn't the best lender for those with a damaged credit profile. LightStream doesn't publish its exact credit requirements, but it generally defines excellent credit as having a credit history of several years with various account types, an excellent payment history, a proven ability to save, and stable and sufficient income.
Best Bank for Auto Loans : Bank of America
Bank of America auto loans come with the backing of a major financial institution. Low rates and a big selection of loan options make it a major competitor in the auto loan landscape. In J.D. Power's 2021 Consumer Financing Satisfaction Study, which deals with auto loans, Bank of America ranked 5th out of 12 in its segment and scored equal to the average.
Offers new, used, and refinance auto loans
Transparent rates and terms online
Well-known financial institution
Quick financing decision
Restrictions on which vehicles it will finance
High minimum loan amount
Bank of America (BofA) is a large financial institution offering a number of auto loan options, including new, used, refinance, lease buyout, and private party loans. The bank has been serving customers since 1904 in San Francisco, when it was known as Bank of Italy. Bank of America now operates out of Charlotte, North Carolina, with more than 67 million consumer and small business clients in addition to its global and business customers.
For the most creditworthy borrowers, APRs start at 5.79% for new vehicles. Used vehicle loans start at 5.99% APR, while refinances start at 6.79% APR. Customers of the bank who are Preferred Rewards members can get up to a 0.5% discount on these rates.
BofA provides a no-fee online application that it claims can offer a decision within 60 seconds. You can choose from a 48-, 60-, or 72-month term online, but there are additional options ranging from 12 to 75 months if you complete the application process at a branch or over the phone.
The main disadvantage to getting an auto loan through Bank of America is its restrictions on which vehicles it will finance. It won't provide loans for vehicles more than 10 years old, those with 125,000 miles or more, or vehicles worth less than $6,000. It also won't provide a loan amount of less than $7,500.
Best Credit Union for Auto Loans : Consumers Credit Union
Credit unions often provide some of the best rates available, but many restrict their membership. Not only does Consumers Credit Union (CCU) make it easy to join, but it is relatively inexpensive to do so. CCU also provides flexible loan amounts and terms to its members.
No minimum or maximum loan amount
Offers new, used, and refinance loans
Offers transparent rates and terms
Lowest rates require excellent credit
Membership in credit union is required
Anyone is welcome to join Consumers Credit Union, one of the largest credit unions in Illinois, with 178,000 members and more than $2.8 billion in assets. The organization began as a trading cooperative and was chartered as a credit union in 1930 in Waukegan, Illinois.
Consumers Credit Union offers auto loan rates to its members as low as 5.24% for new car loans up to 60 months. Like other credit unions, it requires membership, but it's easy to join. You can become a member by paying a one-time $5 membership fee. There are no geographic or employer requirements.
CCU doesn't have a minimum or maximum loan amount. Your loan is approved based on your credit score, credit report, and vehicle information. There's also no minimum loan term—you submit a request based on what you need.
Generally, borrowers with excellent credit will qualify for the lowest rates from Consumers Credit Union. But even members who have less than excellent credit have access to discounts. There's a 0.25% discount available for those who autopay from a CCU account or outside financial institution.
Best for Used Cars : Chase Auto
Chase Auto offers the security of a stable financial institution with competitive rates, high loan amounts, and a concierge car-buying program that makes it easy to get the best rates and financing options for a used car.
High loan amounts
Pre-qualify with a soft credit pull
Car-buying and car-management services
0.25% discount for Chase Private Clients
Must finance from a Chase network dealer
New application needed when switching dealers
Chase Auto is the car financing arm of J.P. Morgan Chase & Co., the largest bank by assets in the U.S. It allows users to shop for, finance, and manage their vehicle all from one account.
Although Chase Auto doesn’t list rates online, it has a calculator that will allow you to get an idea of your potential rate. Chase also offers generous loan amounts ranging from $4,000 to $600,000 and 12 to 84 months flexible repayment terms.
Chase Auto doesn’t require you to make a down payment for a loan, though putting money down can reduce the total amount you need to borrow and your monthly payments. You can also get a 0.25% interest rate discount as a Chase Private Client, which requires you pay a $35 monthly fee or have a minimum average daily balance of $150,000 in qualifying personal, business, and investment accounts or a Chase Platinum Business Checking account.
Financing a car with Chase Auto requires you to choose a dealer in the Chase dealer network. Chase also offers an Auto Preferred program that connects you with a dedicated concierge at a local dealership who can help you find the best discounts and financing options. Unfortunately, if you switch dealers at any point, you will need to start your loan application all over again.
Chase also offers a car-management service called MyCar to all of its customers regardless of whether or not they have a car loan with the bank. This service makes it easy to keep track of?maintenance schedules, estimated market value, safety recalls, and more for any car you own.
Best for Bad Credit : myAutoloan
MyAutoloan not only offers reasonable, low rates, but it also has lenders that work with people who have a history of credit problems. The marketplace provides a great opportunity for borrowers with poor credit to shop deals from multiple lenders at once.
Accepts borrowers with poor credit
Offers new, used, and refinance loans
Sources offers from multiple lenders
Higher minimum loan amount requirements?
Not available in Hawaii or Alaska?
myAutoloan is a privately held financing marketplace operated by Horizon Digital Finance, LLC, since 2003. The platform allows you to compare multiple offers from lenders based on your credit profile. This type of company can help you cast a wide net and get the best offer available. It offers new, used, refinance, private party, and lease buyout loans.
Speed is one of myAutoloan's benefits. Its online form takes just a couple of minutes to fill out and, once submitted, matches you with up to four lender offers. After you choose a lender, you can receive an online certificate or a check within as little as 24 hours.
Requirements in myAutoloan's market vary by lender, but they say they have lenders who work with borrowers with lower scores.
Best for Refinance : AUTOPAY
AUTOPAY offers several refinance options, competitive rates, and?flexible credit requirements. Borrowers can easily compare offers from different lenders on AUTOPAY's site and choose the best deal.
Offers multiple refinance options
Marketplace matches you with best offer
Considers all credit profiles
Excellent credit required for the best rates
AUTOPAY is a refinance broker that specializes in car loans. With more than 700,000 customers served, AUTOPAY offers rates from a variety of banks and credit unions to choose from.
While AUTOPAY's rates start at 2.99%, only those with excellent credit will qualify. According to AUTOPAY, they can, on average, cut your rate in half on a refinance.
AUTOPAY offers more refinance options than many lenders. In addition to traditional auto refinancing, borrowers can choose cash-back refinancing and lease payoff refinancing.
AUTOPAY is a marketplace that makes it easy to shop around for the best deal. It caters to individuals who are rebuilding credit or improving their credit.
Best for Fair Credit : Carvana
For fair credit borrowers in the market for a used vehicle, Carvana provides the ability to shop online for financing and a vehicle at the same time. It has no minimum credit score requirement, providing a financing solution for those with damaged credit.
No minimum credit requirement
Entirely online dealer and lender
Minimum income requirement of $4,000 annually
Only for used vehicles
Carvana is a completely online used car dealer that also provides direct financing. It makes it possible to secure financing, shop for a vehicle, and get a used vehicle delivered without leaving your house. With Carvana, you can shop for a car from your computer or phone and get personalized financing as you search.
As with most lenders, borrowers with the best credit get Carvana's most competitive rates. Carvana does not advertise its rates or publish a table, but you can estimate your monthly payment with an online calculator. That said, even the calculator does not reveal the rate it is using. You must prequalify to know what your interest rate will be.
There is no credit score minimum for Carvana's financing program, making this an attractive option for fair credit borrowers. However, you must have an income of at least $4,000 annually and no active bankruptcies.
We recommend PenFed Credit Union for the best car loan rates. Although you need to be a member, joining is easy, and the credit union offers some of the lowest rates we found, as well as flexible loan limits and repayment terms.
Compare the Best Auto Loan Rates
|Lender||Lowest Rate||Loan Amount||Terms|
|PenFed Credit Union
|4.89%||$500 to $100,000||36 to 84 months|
Best Online Auto Loan
|8.99%* with Auto Pay & Excellent Credit||$5,000 to $100,000||24 to 84 months*|
|Bank of America
Best Bank for Auto Loans
|5.29%||$7,500+||12 to 75 months|
|Consumers Credit Union
Best Credit Union for Auto Loans
|4.94%||No minimum or maximum||0 to 84 months|
Best for Used Cars
|Not Advertised||$4,000 to $600,000||12 to 84 months|
Best for Bad Credit
|3.99%||$8,000 to $100,000||24 to 84 months|
Best for Refinance
|2.99%||$2,500 to $100,000||24 to 96 months|
Best for Fair Credit
|Not Advertised||Any Car They Are Selling||36 to 72 months|
Auto Loan Rates by Credit Score
|?Credit Score||Average APR (New Car)?||Average APR (Used Car)?|
Source:?Experian: State of the Automotive Finance Market Q4 2022
Frequently Asked Questions
Should You Get an Auto Loan From a Bank or Dealership?
It's worth shopping at both banks and dealerships for an auto loan. New car dealers and manufacturers, just like banks, can have attractive loan products. Depending on the borrower's credit score and market-driven circumstances, the interest rate offered by a car dealer can be as low as zero percent or under the going rates offered by banks.
It's important to keep dealership financing as a possibility, but make sure to look for auto financing before deciding where to buy a car. Know your credit score and search online for bank and other lender rates. This should give you a range of what you can expect in the open market and help you determine if seller financing is a better deal for you.
What Is the Best Interest Rate for Auto Loans Right Now?
The average interest rate for new car loans in the fourth quarter of 2022 was 6.55% for 60-month loans and 6.64% for 72-month loans. If you have good or excellent credit you may qualify for lower interest rates; the average rate for a new car for buyers with a credit score of 781–850 was 4.75% in the fourth quarter of 2022.
Which Bank Has the Lowest Interest Rate on Car Loans?
Our top pick, PenFed Credit Union, has some of the lowest interest rates on car loans for new and used cars. Keep in mind that the rate you qualify for will depend on your credit history, the car you're buying, the loan amount, and the type of loan you're looking for.
Can You Get a 0% Interest Rate on a Car?
Some car manufacturers, like Ford, offer 0% interest rates on new cars. However, these incentives are only applicable to certain models, and you'll typically need excellent credit to qualify. If your credit isn't excellent, or you're looking for a vehicle that dealers aren't offering 0% financing on, you'll have to look for another type of car loan.
Are Auto Loan Rates Dropping?
Auto loan rates rose to 6.79% in January 2023, an increase of 264 basis points over the previous year. However, although rates have increased, J.P. Morgan expects vehicle prices to drop by 2.5% to 5% in 2023, which could offset some of the interest costs of a new vehicle purchase.
To select the lenders featured on this list, we evaluated loan offerings from 25 different auto lenders using several criteria. First, we looked at auto loan rates, particularly the APR, and loan options available to borrowers. We also considered loan amount ranges, loan types offered, repayment term options, and credit score requirements. Only companies with a solid reputation were considered. Finally, we reviewed customer service satisfaction and each lender's national reach.
*Lightstream 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 $10,000?loan at?4.99%?APR with a term of?3?years would result in?36?monthly payments of $300.00.
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J.D. Power. "2022 US Consumer Lending Satisfaction Study - J.D. Power."
LightStream. "Annual Percentage Rates."
J.D. Power. "2021 U.S. Consumer Financing Satisfaction Study | J.D. Power."
Bank of America “Our Heritage.”
Bank of America. “Profile.”
Bank of America. "Auto Loan Rates from Bank of America."
Bank of America. "Auto Loan FAQs."
Consumers Credit Union. "Who We Are."
Consumers Credit Union. "2010 Annual Report," Page 2.
Consumers Credit Union. "Auto Loans."
Consumers Credit Union. "You Can Join."
Consumers Credit Union. "Rate Discounts."
Federal Reserve System. "Large Commercial Banks."
JPMorgan Chase & Co. "Enjoy an Exclusive Rate Discount on Your Next Car."
JPMorgan Chase & Co. "Chase Private Client Checking."
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myAutoloan. "About myAutoloan."
Carvana. “Learn Financing.”
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