Although buying a car is an expensive investment, you can save thousands of dollars on fees and interest by selecting the correct lender. In addition, you want the process of buying a car to be simple and transparent so that you can feel secure in the terms you’re receiving.
Based on a variety of criteria, including rates and terms, loan options, prior car-buying experience, and other considerations, CNBC Select assessed dozens of auto loan providers. Whether you’re in the market for a new car or want to refinance your current loan, these are our top choices for auto loan providers.
Best from a big bank
Capital One Auto Finance
APR (Annual Percentage Rate) is based on credit history
Loan intent:
automobiles—new, used, and refinanced
Loan sums begin at $4,000.
Duration: 36 to 72 months
Needs credit:
Not stated
Early repayment penalty:
Not one
Late payment:
Depending on the lender
Pros:
- Accepting applicants with poor credit
- No early repayment penalties
- Prequalification is offered
- Easy-to-use internet resources that let you look up cars and verify projected loan terms
Cons:
- Exclusive to dealers who participate
- To find out the exact loan terms, you must apply at the dealer.
For whom is this intended? Traditional banks can provide competitive rates for auto financing, particularly to their current customers. If your objective is to obtain the best possible loan terms from a large bank, you might want to give Capital One Auto Finance some thought.
Prominent advantages: Capital One facilitates the car-buying process. The bank offers an online Auto Navigator tool that allows you to peruse new and used vehicles from participating dealerships. Additionally, prequalification is offered, enabling you to use a soft credit check to verify estimated terms. When you browse car offers after you’ve been prequalified, you’ll see monthly payments and rates.
Best from a credit union
Pen Fed Auto Loans
The annual percentage rate:
APR, will begin at 5.24%.
Loan intent:
automobiles—new, used, and refinanced
Amounts borrowed: $500 to $500
Durations: 36–84 months
Needs credit:
Not stated
Early repayment penalty:
Not one
20% of the past-due amount, up to a $25 late fee
Advantages:
- Loan amounts begin at $500
- No early repayment penalties
- Prequalification is offered
- Cash rewards with a car-buying service
- Allowable co-borrowers
Cons :
- Credit union membership required
- Late payments subject to fees
For whom is this intended? Whether you’re looking to refinance your auto loan or buy a new or used car, PenFed can be a great option. The credit union provides no prepayment penalties, flexible loan amounts and terms, and reasonable rates. Furthermore, you can view estimated terms and prequalify for a new or used auto loan without undergoing a rigorous credit check.
Notable benefits: The credit union’s TrueCar-powered car buying service will help you locate the best offers, even though you can use PenFed to secure financing for a car loan at any dealer of your choosing. Benefits include exclusive loan rate reductions and cash-back incentives available only to members.