Ashley was a deputy editor for loans and mortgages at Forbes Advisor. She has worked in the online personal finance space since 2017 and is passionate about creating helpful content that makes complicated financial topics easy to understand. Ashley is also a massive horror fan who spends her free time scaring herself with spooky stories, playing video games, and chasing her black cat Salem.
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Jamie was a loans deputy editor for Forbes Advisor. She’s passionate about finance, technology, and the Oxford comma. She enjoys helping people understand complicated financial topics so that they can become confident and take control of their finances. In her free time, Jamie’s an avid board game geek who watches way too many true crime documentaries.
Kennedy Edgerton is an Updates Editor on the Mortgages and Loans team, leveraging his passion for writing and personal finance to produce stimulating content that empowers readers to enhance their lives through advised decision-making. He has written for several publications, including college newspapers, websites, and blogs on topics relating to politics, music, sports and film. Kennedy is a graduate of Morehouse College with a degree in Cinema, Television and Emerging Media Studies.
Ashley was a deputy editor for loans and mortgages at Forbes Advisor. She has worked in the online personal finance space since 2017 and is passionate about creating helpful content that makes complicated financial topics easy to understand. Ashley is also a massive horror fan who spends her free time scaring herself with spooky stories, playing video games, and chasing her black cat Salem.
Jamie was a loans deputy editor for Forbes Advisor. She’s passionate about finance, technology, and the Oxford comma. She enjoys helping people understand complicated financial topics so that they can become confident and take control of their finances. In her free time, Jamie’s an avid board game geek who watches way too many true crime documentaries.
Kennedy Edgerton is an Updates Editor on the Mortgages and Loans team, leveraging his passion for writing and personal finance to produce stimulating content that empowers readers to enhance their lives through advised decision-making. He has written for several publications, including college newspapers, websites, and blogs on topics relating to politics, music, sports and film. Kennedy is a graduate of Morehouse College with a degree in Cinema, Television and Emerging Media Studies.
Doug Whiteman is an award-winning journalist with almost three decades of experience covering personal finance, starting when he was the Washington, D.C.-based consumer news editor and reporter for Associated Press Radio in the 1990s and early 2000s. He’s passionate about making financial information clear and useful for consumers — taking personal finance from “Huh?” to “Ah!” He has been quoted by numerous media outlets including The Wall Street Journal, CBS News and USA Today.
Doug Whiteman is an award-winning journalist with almost three decades of experience covering personal finance, starting when he was the Washington, D.C.-based consumer news editor and reporter for Associated Press Radio in the 1990s and early 2000s. He’s passionate about making financial information clear and useful for consumers — taking personal finance from “Huh?” to “Ah!” He has been quoted by numerous media outlets including The Wall Street Journal, CBS News and USA Today.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.
A loan’s interest rate is a major factor in your overall loan cost—which is why researching and shopping around to find the best auto loan rate is a good idea when you’re buying a car.
We’ve compiled a list of seven lenders offering the best auto loan rates for new and used cars. The lenders were evaluated on factors including the minimum annual percentage rates (APRs) of their loans, eligibility requirements and customer reviews. The exact loan terms and pricing you receive will depend on your personal financial profile.
The ranking is based on the starting APRs—excluding rate discounts for automatic payments and other items—and minimum loan requirements of each lender.
Best Auto Loan Rates Of January 2024
PenFed Credit Union
Minimum Credit Score
PenFed does not disclose this information
PenFed does not disclose this information
Why We Picked It
PenFed offers terms from 36 to 84 months and auto loans from $500 to $150,000, which could make them a good option if you need to finance a smaller amount. Its auto loans are available for new or used vehicles as well as auto refinancing. It also offers them through the company’s car-buying service, which can give you a discount on your rate.
The minimum amount you can borrow with a PenFed auto loan varies depending on your term length. For example, with a 36-month term you can borrow as little as $500; with a 48-month term, $7500; with a 60-month term, $10,000; with a 72-month term, $15,000; and with an 84-month term, $20,000.
Not only can you apply for the full amount needed, but PenFed also allows you to finance up to 110% of the amount needed. You can also apply for a PenFed loan completely online. Keep in mind that while you don’t have to be a PenFed member to apply for an auto loan, you must join the credit union if you are approved and want to accept the loan.
Pros & Cons
- Low minimum loan amount for some terms
- Using PenFed’s car-buying service gives you a discounted rate
- 100% online application process
- Requires membership to close your loan
- Does not disclose minimum credit score needed to qualify
- Charges a late payment fee
Details
- Availability: PenFed offers auto loans in all 50 states.
- Turnaround time: PenFed offers funding in one day or less after you close on the loan.
- Credit requirements: PenFed does not disclose the minimum credit score needed to qualify for its auto loans.
Consumers Credit Union
APR range
Starting at 6.84%
with autopay
Loan amounts
Starts at $7,500 (no max)
Starting at 6.84%
with autopay
Starts at $7,500 (no max)
Why We Picked It
Consumers Credit Union offers terms from zero to 84 months to help borrowers who need to finance a short term auto purchase. Consumers’ loan amounts start at $7,500 with no maximum cap—you can borrow up to any amount you qualify for.
If you qualify for a Consumers Credit Union auto loan, you can finance up to 100% of your purchase. You can also apply for a loan and sign documents online, over the phone or by visiting a local branch.
Consumers auto loans are available for new or used vehicles, RVs, motorcycles and boats.
Pros & Cons
- Same-day funding offered
- Can borrow higher loan amounts
- Offers autopay discount
- Offers prequalification with a soft credit check
- Requires credit union membership
- Charges a late payment fee
- No rate discounts if using car-buying service
Details
- Availability: Consumers Credit Union offers auto loans in all 50 states.
- Turnaround time: Consumers offers same-day funding and can fund your loan as soon as the same day you close.
- Credit requirements: Consumers Credit Union requires a minimum credit score of 620.
Digital Federal Credit Union (DCU)
APR range
Starting at 6.74%
with autopay
Minimum Credit Score
DCU does not disclose this information
Starting at 6.74%
with autopay
DCU does not disclose this information
Why We Picked It
DCU is a Massachusetts-based nonprofit organization that offers a variety of banking and lending products, including auto loans. Loans for new and used vehicles range from $2,500 to $500,000, which could make DCU a good option if you’re looking to borrow a large amount. Repayment terms range from 36 to 84 months.
Auto loans from DCU can be used for new or used cars, refinancing, antique vehicles, motorcycles, recreational vehicles and mobility modifications for vehicles. Borrowers can also take advantage of a few rate discounts, including a 0.50% discount for members with plus or relationship benefits and an additional 0.25% discount for energy-efficient vehicles.
Keep in mind that while you don’t have to be a DCU member to apply for an auto loan, you must join the credit union if you are approved and want to accept the loan.
Pros & Cons
- Offers loyalty, autopay and energy efficiency rate discounts
- No payments required for the first 60 days of the loan
- Customer service available seven days a week
- Must join the credit union to finalize the loan
- Funding can take longer compared to other lenders
- Charges late fees
Details
- Availability: DCU auto loans are available in all 50 states. Keep in mind, though, that you must meet membership eligibility requirements to finalize a loan.
- Turnaround time: After a DCU loan is finalized, you can expect the check to be delivered via FedEx in two to three business days.
- Credit Requirements: DCU doesn’t disclose its minimum credit score requirements.
USAA
APR range
Starting at 6.14%
with autopay
Minimum Credit Score
USAA does not disclose this information
Starting at 6.14%
with autopay
USAA does not disclose this information
Why We Picked It
Founded in 1922 and headquartered in San Antonio, USAA began as a car insurance company but has since expanded and offers a wide variety of banking, investment and lending services. USAA auto loans are available from $5,000 to $500,000 with repayment terms from 12 to 84 months. If you’re approved, you may have the funds within 24 hours.
An auto loan from USAA can be used to purchase a new or used vehicle, refinance an existing loan or pay for a vehicle equipped for someone with a disability. Most customers will receive an approval decision within just five minutes of applying online.
Note that while you don’t have to be a USAA member to apply for an auto loan, you must join the credit union if you are approved and want to accept the loan. U.S. military members and veterans as well as their spouses and children are eligible for USAA membership.
Pros & Cons
- 0.25% autopay discount
- Borrowers with poor or fair credit might still qualify
- Fast approval and funding times
- Must join the credit union to finalize the loan
- Poor Trustpilot reviews
- Charges late fees
Details
- Availability: USAA auto loans are available in all 50 states as well as Washington, D.C. However, you must join the credit union to finalize an auto loan.
- Turnaround time: Most USAA borrowers get an approval decision within five minutes of applying online. If you’re approved, you may receive the funds within 24 hours.
- Credit requirements: USAA does not disclose its minimum credit score requirement.
LightStream
APR range
Starting at 7.74%
with autopay
Starting at 7.74%
with autopay
Why We Picked It
LightStream offers terms from 24 to 84 months and loan amounts from $5,000 to $100,000 , which could make LightStream a good option if you’re looking to borrow a large amount. Its auto loans are available for new or used vehicles, auto refinancing, classic cars, lease buyouts, motorcycles and private-party auto purchases.
LightStream doesn’t require a down payment as many auto lenders do—you can apply for the full amount needed. You can also apply for a LightStream loan online and get funds deposited directly into your account.
LightStream does not impose any vehicle restrictions on the borrower, either. No matter the year, make, model or mileage, you could still qualify.
Pros & Cons
- Same-day funding offered
- Offers autopay discount
- No late payment fees or prepayment penalty
- No down payment required
- No prequalification process
- Must have good to excellent credit to qualify
- Poor TrustPilot customer reviews
Details
- Availability: LightStream offers auto loans in all 50 states.
- Turnaround time: LightStream offers same day funding and can fund your loan as soon as the day you apply.
- Credit requirements: LightStream requires a minimum credit score of 660.
Alliant Credit Union
APR range
Starting at 6.75%
with autopay
Starting at 6.75%
with autopay
Why We Picked It
Alliant Credit Union is one of the largest credit unions in the U.S. It offers a wide range of banking, lending, investing and insurance products—including auto loans. With an Alliant auto loan, you can borrow between $4,000 to $1 million with repayment terms from 12 to 84 months.
Auto loans from Alliant can be taken out for new or used vehicles as well as for refinancing. Alliant also provides a car-buying service to help borrowers find a vehicle through a network of dealerships. Using this service will discount your interest rate by 0.50%, too. Borrowers also have access to a vehicle service program that could save them an average of 25% on car repairs, according to Alliant.
Keep in mind that while you don’t have to be an Alliant member to apply for an auto loan, you must join the credit union if you are approved and want to accept the loan.
Pros & Cons
- Loan amounts up to $1 million
- Same-day preapproval decisions
- 0.50% rate discount if you autopay and use Alliant’s car-buying service
- Must join the credit union to finalize the loan
- Must pay a fee of $18 or $22 (for FedEx Overnight Shipping or FedEx First Overnight Shipping, respectively) to get funds faster
- No physical branch locations
Details
- Availability: Alliant auto loans are available in all 50 states as well as Washington, D.C.
- Turnaround time: Alliant offers same-day preapproval decisions in most cases. If you’re approved, Alliant will send the funds via FedEx two-business-day shipping. You can also ask to have the funds delivered faster—but you’ll have to pay either an $18 fee for FedEx Overnight Shipping or $22 for FedEx First Overnight Shipping.
- Credit Requirements: You’ll need a credit score of at least 640 to be eligible for an Alliant auto loan.
Navy Federal Credit Union (NFCU)
Why We Picked It
Founded in 1933 by a group of U.S. Navy Department employees, Navy Federal has grown to include service members from all branches of the U.S. military and their family members. With a Navy Federal auto loan, you can borrow from $250 to $500,000. Repayment terms for new car loans range from 12 to 96 months while used car loan terms range from 12 to 72 months.
In addition to offering loans for new and used vehicles as well as a refinancing option, the credit union also maintains a car-buying center. This provides guidance and resources to borrowers through the entire process of purchasing a car, such as access to car history reports and insurance discounts.
Keep in mind that while you can apply for an auto loan without joining the credit union, you’ll have to become a Navy Federal member if you are approved and want to accept the loan. To be eligible for membership, you—or one of your family members—must have ties to the U.S. military, Department of Defense or National Guard.
Pros & Cons
- Loans amounts up to $500,000
- Provides access to car-buying center
- Military discounts available
- Must join the credit union to finalize the loan
- Charges late fees
- Direct deposit funding not available
Details
- Availability: Auto loans from Navy Federal are available in all 50 states and Washington, D.C.
- Turnaround time: While the credit union tries to provide approval decisions within just minutes of applying online, it doesn’t publicly disclose a specific funding time. Keep in mind that if you’re approved for a Navy Federal auto loan, the check will be either sent to your address or made available for pick up at a local branch, which could take longer compared to funding from other online lenders.
- Credit Requirements: Navy Federal accepts credit scores as low as 650, which means that borrowers with imperfect credit may still get approved.
Summary: Best Car Loan Rates Of January 2024
Methodology
We reviewed 16 popular auto loan lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
- Loan cost: 30%
- Eligibility and accessibility: 25%
- Loan details: 20%
- Customer experience: 15%
- Application process: 10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges, applicable fees and available discounts. We also looked at minimum credit score requirements, maximum accepted mileages, whether each lender accepts co-signers or co-borrowers and the geographic availability of the lender.
Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online application options, mobile apps and turnaround time.
Where appropriate, we awarded partial points depending on how well a lender met each criterion. Note that these rankings only comprise lenders that offer direct lending to consumers; companies that partner with multiple lenders or offer a lending marketplace were not included.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Pros and Cons of Auto Loans
Before deciding on an auto loan, it’s vital to understand the risks and benefits of such a loan to ensure that you make the best choice.
Pros of Auto Loans
- Manageable payment schedules. Auto loans are a type of installment loan, which charges borrowers on a monthly basis. As such, borrowers are able to manage their payments over the loan term better. Furthermore, auto loans are typically more affordable when compared to other loan types, such as credit cards or personal loans.
- Lower interest rates. Auto loan rates generally range from 3% to 20%, which is lower than personal loan rates between 3% and 36%. If you took a four-year $25,000 auto loan with a 20% interest rate, you’d pay $760.76 monthly and $11,516 in interest over the loan term. For a personal loan of the same amount with a 36% interest rate, you’d pay $989.44 per month and $22,493 in interest over the loan term. The auto loan would save you $228 monthly and $10,976 in interest.
- Flexible qualification requirements. Auto loan lenders offer flexible borrower qualification requirements. Since most auto loans are secured by the vehicle you’re financing, borrowers with less-than-perfect credit can still qualify.
Cons of Auto Loans
- Value depreciation. Your vehicle’s value depreciates over time based on factors such as mileage, condition and vehicle reliability. Most notably, the vehicle’s value depreciates the moment you drive off the lot. On average, a new car loses 9% to 11% of its original value after it leaves the dealership. You can easily end up owing more than the car’s worth—which is referred to as being upside down on your loan.
- Longer loan terms. According to Experian, the average loan term for a borrower with a near-prime risk (an above-average credit score) is 68.4 months. Therefore, an auto loan can leave you obligated to pay for a car that you may not need or want in the future.
- High fees. Dealerships charge a variety of fees that can drive up your upfront expenses. These fees may include a title and registration fee, an advertising fee or a paint protection fee. A credit insurance fee may also be charged—which protects the lender should you lose the ability to pay your loan for reasons outside of your control such as death or injury.
How To Apply for a Car Loan
Follow these general steps to apply for an auto loan:
- Determine your budget. Before applying for an auto loan, it’s essential to know how much you can afford to pay. Use an auto loan payment calculator to understand how much your estimated monthly payment would be depending on your loan amount.
- Check your credit. To get the best rates, you will need an excellent credit score. But many lenders approve loans for people with less-than-perfect credit histories. Before applying, check your credit score so you know where you fall.
- Shop around for the best loan. Prequalification and preapproval can help you understand what loan terms you may be eligible for. This information allows you to compare offers and negotiate. Taking the time to compare loan options and offers from several lenders can help you secure the best terms for your situation.
- Get your documents in order. Lender requirements vary, but most will ask you for paycheck stubs, proof of residence and proof of a valid driver’s license.
- Submit your application. Once you have chosen your preferred lender, whether a direct or dealership lender, submit your formal application online or in person.
What Is a Good Interest Rate for a Car Loan?
Interest rates vary depending on your credit score. The best rates are typically reserved for highly qualified applicants; applicants with damaged credit receive higher rates. A good interest rate for a car loan, though, is one that allows you to finance a car with manageable monthly payments for your budget.
Auto Loan Rates by Credit Score
Because your credit score significantly impacts your interest rate, it should be factored into your loan decision. Here are the average auto loan rates based on user credit score:
How To Get the Best Auto Loan Rate In 2024
The best way to get a low interest rate on an auto loan is by doing your research and preparing ahead of time to set yourself up for success. Here are some general steps to follow:
- Improve your credit score. Your credit score is one of the most important factors that impacts your interest rate. The higher your credit score, the lower your rate. To qualify for a lower interest rate, it’s essential to improve your credit, if necessary. Paying down existing debt may boost your credit quickly.
- Shop around for a lender. Not all lenders are the same. Get quotes from different lenders at the dealership, your local financial institution and online lenders to find the best rates.
- Increase your down payment. Dealers require applicants to pay a certain amount toward a down payment. If you pay a larger down payment than your lender requires, it shows you have more skin in the game and pose less risk to the lender. This can result in the lender offering you a lower interest rate.
- Shorten your repayment term. Risk is key for lenders, and shorter loan terms means reduced risk. Financing over five years compared to six years, or four versus five, will usually get you a better rate, which means you’ll pay less over the life of the loan. But doing so will increase your monthly payment.
- Add a co-signer. If your credit is too low to qualify for a car loan, you might be able to improve your rate by adding a co-signer. When you use a cosigner, you are effectively piggybacking on their credit score to help you get a lower rate and/or loan approval. Your co-signer becomes responsible for repaying your loan if you fail to do so.
Recap: Best Auto Loan Ratings Of 2024
Frequently Asked Questions (FAQs)
Can I negotiate my rate on an auto loan?
While car loans usually have fixed interest rates and loan terms, they can sometimes be negotiated, depending on your lender and the terms. Some things you can do to offset your rate include:
- Asking for a shorter term. The payments will be higher, but your interest rate will likely be lower and you’ll pay less in interest over the life of the loan.
- Declining the “no money down” offer from a dealership. By putting some money down, your loan amount will be smaller and could result in a lower interest rate.
What credit score do I need to buy a car?
Minimum credit score requirements vary by lender; there is no industry standard. However, we recommend a score of at least 670 to get a good interest rate. If you want to secure the lowest rates possible, aim for a score of at least 720.
How can I get a 0% APR on a car loan?
Zero percent financing deals are generally reserved for highly qualified applicants. Plus, they generally restrict the borrower to a shorter term, which means higher monthly payments. You’ll have to decide which is more important: a lower monthly payment or a lower overall loan cost.
When is the best time to buy a car?
The best time to buy a car varies. The new year in the auto industry kicks off in October, which means dealers need to get the old models off the lots, so buyers may find incentives and discounts then. However, as dealers wrap up month-end, quarterly-end and year-end sales objectives in December, buyers may find pricing, financing and cash-back incentives at the end of the calendar year.
Next Up In Auto Loans
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
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