Best Auto Loans for 2018

Best Auto Loans Offered by Online Companies

Today, many of the best auto loan companies aren’t banks; they are non-banks or alternative lenders spawned by the Internet in the wake of the banking crisis in 2008. Online lenders have proliferated in the last five years, offering a completely different loan shopping experience – a quick and easy application and approval process, fast funding, and highly competitive rates. These are the best auto loan companies online for 2018:

AutoPay

Rates (APR)

2.19% - 17.99%

Repayment Terms

24 - 84 months

Min. Credit Score

600

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Min. Loan Amount

$7,500

Max. Loan Amount

$100,000

Min. Annual Income

$24,000

Founded in 2007, AutoPay is an online loan platform that specializes in vehicle loans. It offers refinancing, purchase and lease buyout loans.

AutoPay offers online-only auto loans and also refinances existing car loans. Borrowers can apply directly through AutoPay’s website, where they can apply without providing a Social Security Number or doing a hard credit check (which can negatively impact credit scores).

Prospective borrowers simply need to provide a driver’s license, insurance, proof of income, proof of residence and payoff letter if refinancing their car. The minimum credit score for an AutoPay borrower is 600 and the minimum monthly income is $2,000. AutoPay does allow co-signers on its vehicle loans.

After reviewing offers, prospective borrowers can then apply for a loan through one of the lenders associated with AutoPay, many of whom are credit unions.

AutoPay offers interest rates ranging from a low of 2.19% to a high of 17.99%, and they are based on a borrower’s credit score.

Its loans are available in amounts from $7,500 to $100,000, and in payment terms from 24 to 84 months. There are no prepayment penalties with AutoPay and no application fee to apply for a loan with AutoPay.

AutoPay Pros

• Allows prospective borrowers to compare rates from multiple lenders
• Does not require a Social Security Number to apply
• No hard credit check for initial pre-qualification
• ​Available in all 50 states
• ​No application fees
• ​No prepayment penalties
• Pre-qualification within minutes​
• ​Loan offers good for 30 days
• Allows co-signers

AutoPay Cons

• Lowest rates only available for customers with highest credit ratings
• ​Not everyone may be eligible - minimum credit score (600) and income ($2,000/month)
• Higher loan term lengths can lead to paying more in interest

LightStream

Rates (APR)

3.09% - 9.54%*
(with AutoPay)

Repayment Terms

24 - 84 months*

Min. Credit Score

Good to Excellent

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Min. Loan Amount

$5,000

Max. Loan Amount

$100,000

Min. Annual Income

N/A

LightStream has become one of the more innovative online lenders. Qualified borrowers can use LightStream’s unsecured personal loans for just about anything, although the APR could vary depending on the purpose. LightStream, which has operated as the national online consumer lending division of SunTrust Bank since 2012, used the same innovative approach to auto loans, offering secured or unsecured loans for any type of vehicle – new or used – purchased from any source – dealer, or private seller. You may be able to obtain some of the most competitive loan rates available with good to excellent credit.

LightStream offers both secured and unsecured auto loans. Secured loans (collateralized by the purchased vehicle) are offered to borrowers with less than excellent credit. You will likely need a credit score of at least 660 to qualify for any of LightStream’s loans. However, LightStream does suggest that it looks at more than just FICO credit score during the underwriting process.

Borrowers with excellent credit can obtain an unsecured loan with some of the lowest auto loan rates on the market. That means they don’t have to contend with the hassle of completing all of the lien-holder paperwork.

LightStream offers loan terms of 24 to 84* months on loan amounts between $5,000 to $100,000 (maximum loan terms for loans between $5,000 and $24,999 is 72 months*). APRs currently start as low as 3.09%* with AutoPay on loans for $10,000 and up for both new and used cars from dealers. The highest APR for new and used cars from dealers – 7.69%* with AutoPay – is paid on loans between $5,000 and $9,999 with a 61-72 month term*.

LightStream Auto Loan Pros

• Lowest rates around
• ​No fees
• ​No restrictions on type and age of car
• ​Same day approvals and funding is possible – but not guaranteed
• Secured loans available for borrowers with less than great credit

LightStream Auto Loan Cons

• People with less than good credit need not apply
• Application requires a hard pull on your credit

MyAutoLoan

Rates (APR)

2.19% - 24.99%

Repayment Terms

24 - 72 months

Min. Credit Score

500

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Min. Loan Amount

$8,000

Max. Loan Amount

$100,000

Min. Annual Income

$21,600

MyAutoLoan.com operates as one of several online lending platforms under the umbrella of Horizon Digital Finance, LLC, which was founded in 2003. Through several different websites, Horizon has created an online financing marketplace, offering a variety of direct-to-consumer financing options. MyAutoLoan.com is the flagship site for auto financing, offering financing options for new and used cars purchased from any source.

MyAutoLoan acts as an intermediary, connecting car buyers with lenders based on the type and location of the car as well as the credit standing of the buyer. You submit one application and within a matter of minutes receive up to four offers. If you have great credit, you could currently see one of the lowest auto loan rates of 1.99%. People with less than good credit could see offers as high as 24.9% (29.9% for refinancing).

MyAutoLoan is a great source for people who want to purchase cars from a private seller or who want to purchase their leased vehicle. However, MyAutoLoan limits its services to cars valued at $8,000 or more, less than 10-years old and with fewer than 125,000 miles.

MyAutoLoan is also a great source for first-time car buyers who need help in finding the right financing option. Its website has a number of helpful tools for determining how much car you can afford and the cost of different financing options based on your credit score.

MyAutoLoan Pros

• No application fees
• ​Great resource for first-time buyers
• ​Offers financing for private transactions and leased vehicles
• Financing options for people with bad credit

MyAutoLoan Cons

• Requires a hard pull on your credit
• You can expect a lot of calls and emails from other lenders

Learn More

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CarsDirect

Rates (APR)

Varies

Repayment Terms

Varies

Min. Credit Score

N/A

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Min. Loan Amount

N/A

Max. Loan Amount

N/A

Min. Annual Income

$18,000

CarsDirect made its mark in the auto industry as a car-buying service by connecting consumers with a vast network of new and used car dealers. It streamlined the car shopping and buying experience by matching consumers with sellers who offered the best prices on the car of their choice. It has essentially done the same things for auto financing, connecting car buyers with franchised or independent dealers willing to finance their purchases.

Essentially, CarsDirect operates as a broker, a middleman who puts you in touch with the dealers that have the car and loan you want at the right price. When applying for financing, you fill out one application that could go out to a dozen dealers. The good news is you are likely to find a dealer with the best auto loan offer at your credit standing; the bad news is you are likely to be inundated with emails and calls from dealers and lenders for some time after you have closed your car deal.

The APR you receive is determined by the dealer offering the financing. It is common knowledge that financing through a dealer is generally more expensive because they tend to mark up the rates. If you have very good credit, you are in a better position to negotiate with the dealer; but if you have less than good credit, you will likely have to accept the rate you are offered. If your credit improves over time, you can always try to refinance the loan with another auto lender.

Because CarsDirect can only connect you with financing offers from local dealers, it can be limiting in finding the very best auto loan rates. The other downside is, since you are financing through a dealer, your loan documents can’t be finalized online. You will have to meet with a finance person at the dealer, which most people try to avoid.

CarsDirect Auto Financing Pros

• Good for buyers who want less expensive, older used cars
• ​It does the legwork to find you dealer financing offers
• ​May be the best option for car buyers with less than good credit
• Robust online tools for car search, buying tips, and a financing calculator

CarsDirect Auto Financing Cons

• Buyers must deal directly with dealers to obtain financing
• You can expect to receive a lot of calls from other auto lenders

Best Auto Loans Offered by Banks

Although banks have been challenged by the emergence of online auto lenders, reports of their demise have been greatly exaggerated. By their sheer size, reach, and huge customer bases, banks are still a formidable force in auto financing. Most traditional banks have stepped up their efforts to compete with alternative lenders by beefing up their direct-to-consumer capabilities, and offering the same streamlined application and approval process as other online lenders. In most cases, borrowers can get a discounted APR by being a depositor with the bank. These are the best auto loans offered by banks:

Bank of America

Rates (APR)

As low as 2.84%

Repayment Terms

12 - 60 months

Min. Credit Score

580

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Min. Loan Amount

$5,000

Max. Loan Amount

$100,000

Min. Annual Income

N/A

Long considered one of the best auto loan lenders among traditional banks, Bank of America continues its dominance by offering competitive rates and an easy online application process. As the second largest U.S. bank, Bank of America has a tremendous footprint with nearly 5,000 retail branches serving more than 45 million consumers and businesses. For car buyers who still like the idea of doing business face-to-face, there is probably a location nearby. Or, you can apply online and get approval within 60 seconds. Funding can take place in as little as 24 hours.

Bank of America has aggressively positioned itself as a provider of all types of auto loans, including loans for cars purchased from private sellers and lease buyouts. Interestingly, the bank does not finance cars purchased from independent dealers, except for well known dealers such as Hertz, Enterprise, and CarMax. It does limit loans to cars less than 10 years old with no more than 125,000 miles.

The rates are competitive with other banks and come fairly close to the top online auto lenders. As of June 2017, its best auto loan rate is a 2.74% APR on new cars. The best auto loan rate for used cars and refinancing is 3.09%. Private party financing rates are as low as 3.39%.

Bank of America Preferred Rewards customers can have up to .50% docked from their rate. You can enroll in Preferred Rewards at the time of your application, but it requires that you maintain a 3-month average combined balance of $20,000 in your Bank of America deposit accounts and/or Merrill Lynch investment accounts. Buyers with less than great credit can qualify for financing at higher rates, but the bank may also require a down payment or a minimum loan to value ratio.

Bank of America Pros

• Personal assistance available at 5,000 branch locations
• ​Among the lowest APRs among banks
• ​No fees or prepayment penalties
• ​Quick and easy online application and approval process
• ​Loans available for private party sales and lease buyouts
• Loan discounts for checking and Preferred Rewards customers

Bank of America Cons

• No online pre-approval
• ​You won’t know your actual APR until you apply
• ​Down payment may be required depending on your creditworthiness
• No financing available for cars purchased from independent dealers

Wells Fargo

Rates (APR)

3.89% - 10.51%

Repayment Terms

12 - 72 months

Min. Credit Score

650

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Min. Loan Amount

$5,000

Max. Loan Amount

$100,000

Min. Annual Income

N/A

With nearly 9,000 branch locations, Wells Fargo has the largest footprint of any bank in the U.S., which gives it a leg up in generating new auto loans. Car buyers can walk into a neighborhood branch to apply for a car loan or go the quick and easy route by logging in online. Wells Fargo finances most types of cars purchased new or used from dealers, independent and private parties. Wells Fargo does not offer auto financing in the state of Louisiana.

While the rates available through Wells Fargo are not the lowest, they are still competitive with other big banks. New car loan APRs currently start as low as 3.89%. Used cars purchased from a dealer can qualify for a 4.15% APR. Although Wells Fargo does offer financing for private party purchases, the rate is a little high at 6.49%. These are the best auto loan rates offered by Wells Fargo, but as indicated on its website, only 5% of applicants qualify for them. The maximum loan rate is 10.51%.

The best car loan rates are only available to the most creditworthy borrowers purchasing a car worth $22,000 or more with a maximum 85% loan-to-value ratio. That means, even if you have excellent credit, you may have to come up with a down payment to qualify for the lowest rate. 100% financing is available, but your APR will be higher.

A .25% loan discount is available for checking customers who opt for automatic loan payments to be made from their account. Wells Fargo does charge a $99 origination fee that is financed in the auto loan.

Auto loans may be financed for up to $100,000 and up to a 72-month term. Cars older than seven years are limited to a maximum 48-month term. The minimum loan amount is $5,000.

Wells Fargo Pros

• Quick and easy online application and approval
• ​Same day pre-approval available
• ​Competitive rates for the most creditworthy borrowers
• ​Financing available from $5,000 to $100,000
• ​Financing available for private party or lease purchases
• Relationship discount available

Wells Fargo Cons

• $99 origination fee
• ​48-month maximum term for cars seven years and older
• You won’t know your actual APR until you apply

Chase Bank

Rates (APR)

2.49% - 24.99%

Repayment Terms

48 - 72 months

Min. Credit Score

650

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Min. Loan Amount

$7,500

Max. Loan Amount

$100,000

Min. Annual Income

N/A

Chase Bank is the biggest of the big four banks, in terms of assets, and has more than 5,100 branch locations throughout the United States. Customers can walk into any branch to apply for a car loan or go online to get a loan approved within minutes. Chase offers car loans for up to $100,000 for new and used cars, but a car cannot be more than five years old and it must have less than 75,000 miles.

Car loan rates vary based on the type of car you are buying, your credit score, the loan-to-value ratio and the state you live in. In most states, the best car loan rate available is currently 2.99, while in some states it is 2.69%. Chase has an online calculator that allows you to input information about the car, your credit standing, and your state, so you can see what APR you might qualify for. Used car loan rates currently start at 3.09% for higher priced models and top out at 3.39% for cheaper cars. To get the best APR available, you will be required to come up with a down payment. Chase requires a loan-to-value ratio of 80% for new cars and 95% for used cars.

These represent Chase’s best auto loan rates, which are reserved for their most creditworthy borrowers. All loans are discounted by up to .50% for checking customers who use auto payments. That would lower the best auto loan rate to 2.19%, which is very competitive with the top online lenders. You can choose terms between 48 and 72 months with the best APRs available for 60-month terms.

Chase also offers a car-search service on its website, where you can input information on the year, make, and model of the car you want. The service will locate dealers in your area along with prices so you can compare. In many cases, you can receive a discount on cars purchased through the service.

Chase Bank Pros

• Loans as low as $7,500
• ​No loan fees
• ​Highly competitive APR when combined with customer discount
• Car search service with dealer discount

Chase Bank Cons

• Shortest loan term is 48 months
• ​No pre-approval available online
• APRs vary by state

Best Auto Loans Offered By Credit Unions

Credit unions tend to offer lower auto loan rates than traditional banks, largely because they are non-profit and pass their cost savings on to their members. However, many require you to become a member before you can transact any business with them. Fortunately, many credit unions have loosened their membership requirements, allowing just about anyone to join. These are the best auto loans offered by credit unions:

Alliant Credit Union

Rates (APR)

As low as 2.24%

Repayment Terms

12 - 84 months

Min. Credit Score

N/A

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Min. Loan Amount

N/A

Max. Loan Amount

N/A

Min. Annual Income

N/A

Alliant Credit Union is the fifth largest credit union in the U.S. servicing more than 280,000 members. Along with meeting some minimal membership requirements, all you need to become a member of Alliant is to open a savings account with a $5 deposit. If you don’t meet any of the membership criteria you can qualify by making a one-time donation to Foster Care for Success.

Alliant offers auto loans for most types of cars – new, used, and from private sellers – for as low as $4,000. It offers loan terms of up to 84 months for new and used cars but its best auto loan rates are limited to 60 month terms.

As of June 2017, its lowest auto loan rate is 2.24% for new car purchases. The APR for used cars and refinancing is just a tick higher at 2.49%. Alliant does offer used car financing for older cars – 10 years or older – but the best APR is 5.49%. You can lower your APR by as much as .50% by opting for automatic payments and for using Alliant’s car buying service. That would make its lowest auto loan rate 1.74%, which is hard to beat.

You can apply online and receive pre-approval the same day, allowing you to shop for a car with confidence.

Alliant Credit Union Pros

• APRs below industry average
• ​Among the lowest APRs when combined with discount up to .50%
• ​Same day pre-approval
• ​No fees
• ​Loans as low as $4,000
• No minimum income requirements to apply

Alliant Credit Union Cons

• Requires membership

Navy Federal Credit Union

Rates (APR)

1.99% - 17.99%

Repayment Terms

0 - 96 months

Min. Credit Score

700

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Min. Loan Amount

N/A

Max. Loan Amount

N/A

Min. Annual Income

N/A

What is the largest credit union that you’ve probably never heard of? It’s the Navy Federal Credit Union (NFCU), which serves members of the military and employees of the Department of Defense as well as their families. Offering a wide range of financial services, including checking, savings, and mortgages, the NFCU also offers some of the best auto loan rates around.

To obtain an auto loan with NFCU, you do need to be a member – either an active or retired member of any service branch or an immediate family member of someone who is eligible for membership. You can also qualify as a civilian employee or retiree of the Department of Defense.

NFCU offers loans for terms between 36 and 96 months on new cars, and up to 72 months on used cars. New cars are defined as any vehicle manufactured within the last three years with less than 7,499 miles. It also differentiates between late model used cars – cars less than four years old with 7,500 to 30,000 miles – and used cars – any car with more than 30,001 miles.

That’s important because late model cars can qualify for the same low APR as new cars, which is currently 1.99%. The lowest auto loan rate for a used car is 3.79%. Generally, the lowest APRs are applied to shorter loan terms up to 60 months. The lowest APR for a 96-month loan is 4.49%, regardless of whether it is a new or late model car. The lowest auto loan rates in all categories are reserved for the most creditworthy borrowers with a credit score of at least 700.

The application takes just five to ten minutes to complete online and approvals take a few hours. You can also receive a pre-approval so you can go out and shop as a cash buyer. Loans cannot be used for a private seller.

NFCU Pros

• Extremely competitive APRs
• ​Late model car category for lowest APRs
• .25% discount for in-branch or phone applications

NFCU Cons

• Strict membership requirements
• Difficult to qualify for best rates

Digital Federal Credit Union

Rates (APR)

As low as 2.24%

Repayment Terms

0 - 84 months

Min. Credit Score

650

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Min. Loan Amount

$5,000

Max. Loan Amount

$100,000

Min. Annual Income

N/A

Digital Federal Credit Union (DCU) is one of the top 20 credit unions in the country. Although its physical presence is limited to 22 branch locations in New England, it has a sizable online presence with more than 500,000 members in 50 states. One of its biggest attractions is its auto loan offerings, with low rates and a wide number of options to choose from.

Like other credit unions and banks, DCU offers auto loans for new and used cars. However, unlike the others, DCU offers the same low APRs on both new and used cars. With many of its competitors charging as much as 20% more for used car loans, that is a big advantage for used-car buyers. The lowest auto loan rate is currently 1.99%, available on loans up to 65 months. APRs can be discounted by as much as .50% when you qualify for relationship benefits with a DCU checking account and by using electronic payments through online or mobile banking.

If you’re interested in buying a car that is out of the ordinary, such as a classic or antique car, DCU is the place to go. But, just so you know, the APRs on these types of cars are generally much higher. DCU makes it a practice to be all things to all car buyers, including offering a loan package to fit their specific needs.

DCU Pros

• Very competitive APRs when combined with .50% discount
• ​Loan terms up to 84 months
• ​Same low APR for both new and used cars
• Discounts for energy efficient cars

DCU Cons

• You need a DCU checking account to get the lowest APR
• Maximum loan amount is $50,000

Best Auto Loans for Individuals With Poor or Bad Credit

There are many consumers in the U.S. who have subprime credit scores. If you are among them, it doesn’t necessarily exclude you from being able to obtain auto financing. It just excludes you from being able to obtain a loan from traditional lenders. If you are unable to wait to improve your credit before buying a car, there are lenders who will work with you; just don’t expect to receive the most favorable loan terms.

Auto Credit Express

Rates (APR)

Varies

Repayment Terms

36 - 72 months

Min. Credit Score

N/A

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Min. Loan Amount

N/A

Max. Loan Amount

N/A

Min. Annual Income

$18,000

For people with bad credit, it can be a frustrating experience bouncing from lender to lender trying to find one who will work with them. Even if they find one, they don’t know if they are being ripped off because they have nothing to compare it to. Auto Credit Express is the largest automotive special finance total solution firm in the U.S., offering people with bad credit access to more than 1,200 car dealers and lenders. It works with first-time buyers and people with various credit issues, even those with past repossessions and bankruptcies, to find them affordable financing for new or used cars.

There are no automatic denials due to high mileage or price restrictions. Each car loan is evaluated individually based on your credit background, the size of your down payment, trade-in options and the type of car.

It is entirely an online service. You apply online, after which you receive a confirmation number you use to log into your account. There you will receive status updates and notice of any offers. Unfortunately, there are no online tools or resources to help applicants better understand their options and costs. For instance, tools to calculate payments based on different APRs or varying down payment amounts. But, for most applicants, Auto Credit Express does deliver.

Auto Credit Express only works with dealers and lenders that report your payments to the credit bureaus. That means you can rebuild your credit with on time payments.

As long as you are at least 18 years old and a legal U.S. resident, all you need to apply is at least $1,500 in monthly gross income and full-time employment.

Auto Credit Express Pros

• Access to a large network of lenders and dealers willing to work with subprime borrowers
• ​Reasonably low rates
• ​Easy process to obtain offers
• A+ rated by the Better Business Bureau

Auto Credit Express Cons

• None, if you have bad credit and are in need of car financing