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Ranging from 4.67% to 6.54% APR, AutoPay, PenFed, Auto Approve, Consumers Credit Union, Auto Credit Express and iLending offer the best auto loan rates
Key Takeaways:
Getting the best auto loan rates can save you thousands of dollars over the course of your loan. We at the MarketWatch Guides team researched the top car loan providers to bring you the best options for financing or refinancing your vehicle. We compared interest rates, industry ratings and customer reviews to help you make an informed decision.
| Lending Partner | Loan Terms | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|
| 48-84 Months | 5.29% | 550 | ||
| 12-84 Months | 5.24% | 620 | ||
| 36-84 Months | 4.99% | 640 | ||
| 12-84 Months | 0% | 300 | ||
| 12-84 Months | 5.49% | 575 |
| Lending Partner | Loan Terms | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|
| 48-84 Months | 5.29% | 550 | ||
| 12-84 Months | 5.24% | 620 | ||
| 36-84 Months | 4.99% | 640 | ||
| 12-84 Months | 0% | 300 | ||
| 12-84 Months | 5.49% | 575 |
Learn more about our methodology and editorial guidelines.
According to our research, AutoPay currently offers the best auto loan rate for new car purchases, with annual percentage rates (APR) as low as 4.67% for new vehicles. PenFed Credit Union, Auto Approve, Consumer’s Credit Union, Auto Credit Express and iLending also offer some of the most competitive rates available.
The table below highlights the lenders offering the best car loan rates. To allow for an easy comparison of top lenders’ best rates and terms, we’ve broken down each provider’s lowest rate, loan amounts and term lengths available:
| Top Auto Loan Lender | Lowest APR | Loan Amount | Term Length | Our Award |
|---|---|---|---|---|
| AutoPay | 4.67%** | $2,500 to $100,000 | 24 to 96 months | Best Auto Loan Rates |
| PenFed Credit Union | 5.24% | $500 to $150,000 | 36 to 84 months | Best Credit Union Auto Loan |
| Auto Approve | 5.24%** | $5,000 to $85,000 | 12 to 84 months | Best Auto Refinance Rates |
| Consumers Credit Union | 6.54% | No minimum or maximum | Up to 84 months | Excellent Credit Union Auto Loan |
| Auto Credit Express | Varies | Varies | Varies | Best Auto Loan for Bad Credit |
| iLending | Varies | Varies | Varies | Best Auto Refinance Loan for Bad Credit |
*Starting APRs for the providers in the table above are only available for borrowers with excellent credit.
**Rates are for refinancing
In our review of lenders, we found that the best auto loan companies are Autopay, PenFed Credit Union, Auto Approve, Consumers Credit Union, Auto Credit Express and iLending.However, to find the best car loan for you, we encourage you to shop around and compare auto loan rates from various lenders — including banks, credit unions, dealerships and online providers.
With that in mind, below we review several lenders offering the best rates, covering each of the top auto financing companies that made our list in detail.
Starting APR: 4.67% for refinancing or 5.69% for new and used car purchase loans
Loan amounts: $2,500 to $100,000
Loan terms: 24 to 96 months
Availability: 50 states
Minimum credit score: 560
AutoPay is an online lending marketplace that offers auto loans, lease-buyout loans and auto loan refinancing. AutoPay also gives you greater flexibility with loan terms, which range from 24 to 96 months. This means you might be able to pay your auto loan off quickly with a shorter term.
Based on our research, borrowers with good credit can find APRs as low as 4.67% for new and used vehicles from AutoPay’s network of lenders. People with bad credit may still qualify for financing since the company’s minimum credit score for applicants is 560.
AutoPay has a solid reputation in the lending industry. The company holds an A+ rating and accreditation from the Better Business Bureau (BBB) and an 4.7-star rating on Trustpilot from over 500 customer reviews.
Positive AutoPay reviews center on the company’s excellent customer service, knowledgeable staff members and fast, transparent process. While in the minority, negative reviews mention high interest rates and issues with paperwork that led to car loans or refinancing not being approved.
Starting APR: 5.24% for new cars and 6.49% for used vehicles
Loan amounts: $500 to $150,000
Loan terms: 36 to 84 months
Availability: 50 states
Minimum credit score: 650
Pentagon Federal Credit Union (or PenFed) offers competitive auto loan rates for both new and used vehicles. PenFed used to be primarily for military members and their families but is now open to the general public.
PenFed’s starting APRs for used vehicles are relatively low at 5.74%. but to be eligible for those rates, you’ll need to have good credit and use PenFed’s car-buying service. PenFed members get access to special deals, such as cash-back promotions, for shopping at partner dealerships.
However, qualifying for a PenFed auto loan might be hard for some. The credit union only accepts borrowers with credit scores of 650 or higher. In addition, PenFed has a $29 fee for late loan payments.
PenFed isn’t accredited by the BBB but is rated A+ by the organization.
The credit union has an impressive average rating of 4.6 out of 5.0 stars on Trustpilot based on more than 1,350 customer reviews. Customer ratings are considerably lower on the BBB website, however, where more than 230 reviewers give PenFed an average of 1.1 out of 5.0 stars.
Positive reviews consistently mention a smooth and easy loan application process and low rates. Customers reporting negative experiences tend to mention slow processing times for loan applications.
Starting APR: 5.24%
Loan amounts: $5,000 to $85,000
Loan terms: 12 to 84 months
Availability: 50 states
Minimum credit score: 600
Auto Approve is a loan aggregator for vehicle refinancing and lease buyouts. The company works with a vast network of lenders, including banks, credit unions and finance companies, to find you the best auto refinancing rates.
Auto Approve can be a good choice if you’re looking to refinance but aren’t sure where to start. Once you apply for a refinance loan with the company, your application is assigned to one of its loan consultants. That person guides you through the entire refinance process, pointing you to the best loan options available and then submitting your application to the lender you choose.
Auto Approve has a minimum credit score of 600, which means anyone with poor credit won’t be eligible for a loan.
Auto Approve is accredited by the BBB and holds an A+ rating from the organization. In addition to a nearly 4.3-star rating from more than 470 customer reviews on the BBB’s site, the company has an average of 4.6 stars across more than 7,300 reviews on Trustpilot.
There are many positive reviews of the company, and they typically cite Auto Approve’s smooth and easy process. Customers who leave negative reviews tend to mention unexpected fees.
Starting APR: 6.54% for new cars and 6.93% for used vehicles
Loan amounts: No minimum or maximum
Loan terms: Up to 84 months
Availability: 50 states
Minimum credit score: 620
Illinois-based Consumers Credit Union is open to national membership. The lender’s rates are typical for the industry, but its lowest starting APR applies to vehicles made as far back as 2021. That means borrowers who want to refinance cars made in recent model years may get better rates with Consumers than they would getting used car loans with a different provider.
The credit union offers a wide range of terms and loan amounts. Its best auto-loan rates start at 5.54% for cars made in or after 2021. Other starting APRs include 5.79% for cars made from 2017 to 2020, and 7.04% for cars made in 2016 or older. As long as you qualify, you can borrow nearly any amount, with term lengths of up to 84 months.
While Consumers Credit Union is a membership-based organization and not a bank, anyone can become a member. All you need to do is provide a Social Security number or a tax identification number and pay a $5 nonrefundable fee to the Consumers Cooperative Association.
Consumers Credit Union has a relatively strong standing in the industry. It’s accredited by the BBB and holds an A+ rating from the organization.
There aren’t many Consumers Credit Union customer reviews online. However, the positive reviews we found praise the lender’s good customer experience, consistently great rates and low fees.
Customers are also pleased to be part of a member-owned organization instead of a bank. That said, people who report a negative experience with Consumers Credit Union mention technical issues and delays with applications.
Starting APR: Varies
Loan amounts: Varies
Loan terms: Varies
Availability: 50 states
Minimum credit score: 400
Auto Credit Express is a loan aggregator that specializes in bad-credit auto loans, matching consumers with lenders that meet their needs. We awarded the company with the title “Best Purchase Loan for Bad Credit.”
The company provides extensive tools and blog posts on its website to help you better understand credit and the car loan process. Once you apply for an auto loan, you’ll be able to compare offers from different lenders at the same time.
Auto Credit Express could be a great option for people who have very poor credit and can’t get loan approval from other providers. Its minimum credit score requirement is only 400, which opens eligibility to almost anyone.
Auto Credit Express is accredited by the BBB and holds an A+ rating from the organization. Despite this rating, customers on the BBB’s site only give Auto Credit Express a 1.0-star rating. However, this is based on only a small number of reviews.
Trustpilot reviews are much more positive, as more than 3,500 consumers give the company an average of 4.5 stars. Trustpilot also rates the company as “Excellent.”
Positive reviews for Auto Credit Express mention excellent communication and customer service, while the few negative reviews describe a total lack of communication.
Starting APR: Varies
Loan amounts: Varies
Loan terms: Varies
Availability: 50 states
Minimum credit score: 510
A refinance auto-loan specialist, iLending is a viable option for borrowers looking to get lower interest rates and better terms for their vehicles. The company works with a network of lenders and financial institutions. Its minimum credit score requirement is just 510, which is why we gave it the title “Best Refinance Loan for Bad Credit.”
Since iLending functions as an auto refinance marketplace, your loan rate and term will depend on which lender you choose to refinance with. ILending doesn’t provide purchase loans for new or used vehicles.
ILending’s reputation on customer service is positive overall. The company has an A+ rating and accreditation from the BBB, along with a 4.8-star rating average from almost 900 customer reviews. Similarly positive reviews can be found on Trustpilot, where iLending has a 4.8-star rating average from over 1,100 reviews.
The majority of positive reviews on both sites mention the ease of iLending’s approval process, great customer service and low auto-refinance rates.
While they’re in the minority, negative reviews of iLending do exist. The company has had 63 BBB complaints from consumers closed within the last three years. This is a small number compared to the amount of business the loan aggregator does.
The few complaints we found discuss problems with higher interest rates and higher loan amounts than the borrowers previously had.
Finding the best auto loan rates requires some background knowledge. There are many factors that determine the best auto loan rates you can get and several methods that can help you get the lowest rates possible.
Below, we’ll discuss what current auto loan rates are, what is considered a good interest rate and the difference between an interest rate and APR. We’ll also go over the factors that lenders consider when determining your auto loan rates.
There are many methods you can use to find the best auto loan rates for your situation. In the sections below, we’ll outline a few ways to lower your interest rates for new and used car financing.
Your credit score is the primary factor that determines the best auto loan rates you’ll find from a lender. Even if you’re only able to improve your score by 30 to 40 points, the difference could be a huge help in getting lower interest rates.
Say you were planning to finance a used car and your credit score improved from 650 to 680. Your rates could improve from about 12% to around 8%, allowing you to save thousands of dollars on a used vehicle. There are many ways to improve your credit score, and below are seven steps you can take to get started and lower your auto loan rates.
If your credit score is less than desirable — but you need a car soon — getting a co-signer on your loan could make it easier to find lower rates. If a family member or friend has excellent credit, you could gain access to some of the best auto loan rates.
Read over your loan terms carefully to make sure you can cover monthly costs. If you make late payments or default on the loan, it will affect both your and your co-signer’s credit scores.
To find the most competitive rates available, compare auto loan offers from various lenders when making a decision on who to borrow money from. Technological advancements have made comparing rates online a key part of this process.
There are many online lending marketplaces that allow you to compare multiple providers at once, helping you find the best deal. On top of this, using an auto loan calculator lets you compare the total cost of each financing option.
When comparing auto loan rates, there’s more to keep in mind than just APRs when you’re looking for the best rates possible. To see the big picture, do the math and look at the total cost of your loan over its lifetime — and not just the APR or the monthly payment.
* The calculators used on this website are being provided for educational purposes only. Data will not be collected or stored. The results are estimates based on information you provide and may not reflect actual pricing of your quote.
To get the lowest possible rate on a car loan, consider the following factors when shopping:
An interest rate is the annual percentage of the loan that the lender charges you on top of the money you’re borrowing.
Let’s say you have a total loan of $60,000 that you have to pay back across 48 months. Every month would be $1,250, which would make every year $15,000 that you’d pay back. If you have an interest rate of 5.0% on this loan, 5.0% of $15,000 is $750. So every year, you’d pay back $15,750 on your loan.
Your loan’s APR (annual percentage rate) is your interest rate plus all loan fees. This is often the auto loan rate you’ll see advertised across lender and broker sites. Even a small difference in your APR could save you hundreds or thousands over the life of the loan.
The loan term or term length refers to how long you have to repay your auto loan. The longer the loan term, the lower your monthly payments will likely be. However, you’ll pay significantly more in interest overall than you would with a shorter term.
Some lenders offer rate discounts on their car loan products. One common discount is a reduction of your APR when you sign up for automatic payments from your bank account or credit card. Based on our research, providers usually offer to take between 0.25% and 0.5% off of your APR for signing up for autopay.
Lenders often charge fees for missed or late car payments. Some auto lenders also charge borrowers prepayment penalties for paying loans off early because it reduces the amount of interest the lender collects. These fees and penalties are in the fine print of a loan contract, so read it carefully before agreeing to a loan.
Generally speaking, a good auto loan interest rate is anything below 4.0%. However, what a good interest rate is for you depends heavily on your credit score and the average rates within your credit band. It’s best to look for rates below these averages when gauging what lenders to choose.
Based on a study conducted by our research team, the average interest rates across credit profiles are 6.63% for new car loans and 11.38% for used car loans. The table below shows the average auto loan rates (full APRs) for new and used cars based on buyers’ credit scores, according to Experian’s State of the Automotive Finance Market Q4 2023 report.
| Credit Score | Average New Car Loan APR | Average Used Car Loan APR |
|---|---|---|
| 781 to 850 | 5.64% | 7.66% |
| 661 to 780 | 7.01% | 9.73% |
| 601 to 660 | 9.60% | 14.12% |
| 501 to 600 | 12.28% | 18.89% |
| 300 to 500 | 14.78% | 21.55% |
Much like car insurance companies, lenders determine auto loan rates based on information about you and your vehicle. While most lenders use many of the same factors to determine rates, some may weigh specific factors such as your credit history differently than others.
There are many factors that go into auto loan rates. Below are some of these factors in detail:
Although there are some small differences in how you apply for an auto loan depending on the lender, the process is mostly consistent. Here are our best steps to apply for an auto loan:
| 1. Make sure you’re eligible | Most lenders require you to be at least 18 years old and have a valid Social Security number or tax identification number. Credit unions usually require borrowers to be members. |
| 2. Check your credit score | Lenders have different minimum credit requirements. While most lenders offer lower interest rates for good-credit auto loans, some providers specialize in lending to borrowers with bad credit.
Check your score first to see which lenders are likely to offer you the best auto loan rates. |
| 3. Get preapproved | Some lenders give you the option to get preapproved for an auto loan. Usually, you can do this through a lender’s website.
This can help you understand what you can afford before you start shopping for vehicles. It can also help you negotiate at the dealership. |
| 4. Find your new vehicle | Once you know your budget, you can start shopping. Many dealerships have an online presence to help you research quickly and easily, and retailers like Carvana operate entirely online. |
| 5. Listen to the dealer’s offer | Dealerships have special relationships with lending institutions and may offer lower rates than what you can find on your own. Let them know what your preapproved rate is and see if they can beat it. |
| 6. Compare offers | Look at your preapprovals and the loan offer from the dealership. You can sometimes use online tools to generate quick offers from other lenders. Look for hidden fees and other fine print. |
| 7. Choose the best offer for you | When choosing which offer to accept, consider all aspects of your loan offers (not just APRs) and find the one that best fits your financial situation.
Work with the lender to get all of your paperwork in order. When it’s ready, sign for your loan. |
In this article, along with providing helpful purchasing tips for those who are looking for the best auto financing options, we reviewed the top six lenders offering the lowest auto loan rates:
| Lending Partner | Loan Terms | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|
| 48-84 Months | 5.29% | 550 | ||
| 12-84 Months | 5.24% | 620 | ||
| 36-84 Months | 4.99% | 640 | ||
| 12-84 Months | 0% | 300 | ||
| 12-84 Months | 5.49% | 575 |
| Lending Partner | Loan Terms | Min. APR | Min. Credit Score | See More |
|---|---|---|---|---|
| 48-84 Months | 5.29% | 550 | ||
| 12-84 Months | 5.24% | 620 | ||
| 36-84 Months | 4.99% | 640 | ||
| 12-84 Months | 0% | 300 | ||
| 12-84 Months | 5.49% | 575 |
Below are some frequently asked questions about the best auto loan rates, lenders and financing:
According to our research, AutoPay, Auto Approve, PenFed Credit Union and Consumers Credit Union have the best auto loan rates for vehicle purchases and refinancing. However, the best choice for you depends on your unique financial situation.
The lowest auto loan rates offered currently are 4.67% for purchase loans and for auto refinance loans — both from AutoPay. However, these rates are only available for those with excellent credit and a 36-month loan term.
The bank that can offer you the lowest interest rate for a car will vary based on factors such as your location, your credit history and your down payment amount. To get an idea of the rates you might get from a bank, you may be able to get prequalified on that lender’s website.
Consumers Credit Union and PenFed Credit Union are known to have low auto loan rates, especially for people with good credit. Compare APRs from each provider to find your most competitive auto financing rates.
We found iLending to be one of the best companies if you need to refinance a car loan. This online marketplace offers some of the lowest rates for refinancing auto loans. We also recommend it to those who have lower credit scores.
Based on our research, an APR of less than 4.0% is good for a 72-month car loan. To access the best auto loan rates, you’ll usually need a 36-month car loan.
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies.
We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.
Our credentials:
*Rates as of 7/14/23
**Data accurate at time of publication.
If you have questions about this page, please reach out to our editors at editors@marketwatchguides.com.
