Companies with the lowest tariffs (2022)

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Finding the best auto loans can be tricky. There’s a sea of ​​providers out there, and ending up with a bad car loan can mean years of debt. The difference between a good interest rate and a bad interest rate can amount to thousands of dollars after all.

When making this major financial decision, it’s important to compare your loan options. This list will show you a number of reputable auto lenders to help you decide where to apply, whether you have great credit or not. We’ll also explain the application process as well as tips on how to get the lowest auto loan interest rates.

In this article:

Best Auto Loan Providers

There is no best auto loan provider for everyone. Most people looking for car loans will want to find a provider with the lowest annual percentage rate (APR). However, the interest rate you receive depends on your credit history and various other factors. Different financial institutions may also offer different minimum and maximum loan amounts.

Finding the best provider also depends on the type of car loan you need: a new car loan, a used car loan or a refinance loan. The table below presents information on some of the best auto loan providers for a variety of borrower types. Some of the providers listed below administer loans directly to customers, while others are brokers who match customers with loans. Both can be good starting points for researching the best auto loans.

Automatic loan
Vendor
Minimum
Credit score
Amount of the loan Lowest APR offered
PenFed
Box
610 $500 to $100,000 0.99%
Automatic approval 580 $5,000 to $85,000 2.25%
RateGenius 550 $10,000 to $90,000 2.39%
Automatic payment 630 $2,500 to $100,000 1.99%
myPrêtAuto 575 minimum $5,000 2.49%
Tresl 500 $5,000 to $100,000 2.49%
Bank of America Unspecified minimum $7,500 2.29%
Consumers
Box
640 No minimum 2.24%
LightStream 660 $5,000 to $100,000 3.99%* (with AutoPay and great credit)
Car loan
Express
No minimum
credit
Varies by lender Varies by lender

*Rates as of 04/18/2022

Best auto loan companies with the lowest rates

Based on the information available, we believe that some of the best auto loans can be found from the following companies:

  • PenFed Credit Union: Lowest Auto Loan Rates
  • Automatic approval: ideal for refinancing
  • Auto Credit Express: the best for bad credit

We’ll go into more detail about each company’s history, pros and cons, service details, and customer reviews so you can find the best car loan for you.

PenFed Credit Union was originally created to serve the military and their families, but its services have since been made available to the general public. Although not accredited by the Better Business Bureau (BBB), PenFed Credit Union has an A+ BBB score.

The credit requirements for a PenFed Credit Union car loan are higher than many other lenders, but it offers some of the lowest interest rates in the industry. PenFed also offers a car buying service, so you can buy a vehicle and complete a loan application all in one place.

PenFed has a moderate reputation for customer reviews online, although most complaints filed through the BBB relate to PenFed home loans. Also, given the size of PenFed, the number of customer complaints is relatively low.

Advantages of PenFed Credit Union PenFed Credit Union Disadvantages
Offers exceptionally low interest rates Moderate customer service reputation
BBB A+ rating Does not offer loans to drivers with bad credit
Customer reports describe a slow application process

Auto Approve only offers auto loan refinance, not purchase loans. However, it does it well. While drivers with poor credit may not be eligible for an Auto Approve loan, those who are eligible may find interest rates as low as 2.25%.

Auto Approve holds BBB accreditation, an A+ rating and a 4.7 out of 5.0 star rating based on approximately 400 reviews. Since even a one percent interest rate cut could save you hundreds of dollars, there’s no reason not to see what refinance deals you can find with Auto Approve.

Automatic Pro Approval Disadvantages of automatic approval
Low interest rates Only offers loan refinancing, no purchase of loans
Solid reputation for customer service Does not offer loans to drivers with very bad or no credit
Quick and easy application process

To learn more about this provider, read our Automatic Approval Review. You can also visit AutoApprove.com to compare rates.

Auto Credit Express specializes in loans for customers with poor credit. The company even has representatives who can help loan seekers build their credit scores through loan repayments.

Customer experiences with Auto Credit Express vary, but few loan providers seek to work with customers who have particularly bad credit. If you need a vehicle and are having difficulty getting a loan due to bad credit, Auto Credit Express can help. Even bankrupt or repossessed drivers may be able to get a car loan from Auto Credit Express.

Credit Auto Express Pros Auto Express Credit Disadvantages
Offers financing for customers with bad or no credit Bad customer reviews
Match customers with loans based on credit profile
Offers special military rates

To learn more about this provider, read our Auto Express Credit Reviewand visit AutoCreditExpress.com to compare rates between multiple lenders.


How to get the best auto loan rates

When shopping for the best auto loans, you’ll have access to the lowest rates if you have a good credit score and financial history. The more money you have, the lower the interest rate you will be offered. Customers with high credit scores, many assets (like a home), and high gross annual income will qualify for better rates.

If you’re trying to improve your credit score, be sure to do the following:

  • Pay your bills on time
  • Pay off all of your credit card bills each month
  • Do not take out many large loans
  • Check your credit report and dispute any inaccuracies
  • Pay off as many existing debts as possible

Auto loan interest rates go up and down all the time. So, the best auto loans may have different rates in one period versus another. Below, you can see the average auto loan rates for new and used cars by credit score that apply to the first quarter of 2022. This information comes from Experian’s Auto Finance Market Report. (Q1 of 2022)

Credit score Average APR of a new car Average APR of a used car
781 to 850 2.40% 3.71%
661 to 780 3.56% 5.58%
601 to 660 6.70% 10.48%
501 to 600 10.87% 17.29%
300 to 500 14.76% 20.99%

Building your credit score can take years, and many people may need a car loan sooner than they can rebuild poor credit. In the short term, you can find good loan terms by comparing offers from several lenders and having someone with strong credit co-sign your loan.


Types of car loans

Broadly speaking, auto financing can be divided into two categories: purchase loans and refinance loans. A purchase loan is a loan contracted to acquire a new or used vehicle. Some lenders may work through dealerships to provide purchase loans, and others may also offer loans for private purchases.

A refinance loan is a second loan taken out to pay off an existing car loan. The reason drivers may choose to refinance a loan is that the new loan offers a lower interest rate, which means they will pay a lower overall cost.

People whose credit rating or income has recently changed may be interested in a refinance loan. Or, if you feel your original loan has particularly bad terms, refinancing your loan with a better lender can save you money.

There are also purchase loans for lease buyouts, in which drivers choose to buy a vehicle after renting it for a certain period of time.


How to apply for a car loan

Many lenders allow borrowers to apply for an auto loan through an online application. In some cases, borrowers can receive same-day funding. Generally, to apply for a car loan, you will need to provide the following information:

  • Personal data such as name, address and age
  • Social Security number
  • Gross annual income information
  • Vehicle information such as vehicle identification number (VIN), age and mileage

You may also be required to show or submit a copy of the following documents:

  • Driving license
  • payslips
  • References

When you apply for a loan, some companies may offer you the option of having a co-signer, another person who will take responsibility if you fail to repay your loan. A co-signer may be required for those with exceptionally poor credit.

As with personal loans and other forms of credit, many auto lenders offer a pre-qualification process that doesn’t hurt your credit.

If you want to enter the negotiation with the upper hand, consider getting a pre-approval letter from a lender before going to the dealership. With this you can show the dealer that you have full credit approval up to a certain amount and that you are a serious buyer.

Best Auto Loans: Conclusion

You can find the best auto loan rates from many different providers such as banks, credit unions, and online lenders. There are different ways to get better rates so you can get the best auto loan possible. You should shop around and compare your options to get the best deal possible.

To start comparing the best auto loans, visit AutoApprove.com.

Here are some frequently asked questions about the best auto loans:

Best auto loan: FAQ

Disclaimer: Our research team aims to keep this information accurate and up-to-date, but you will get the most up-to-date information from financial institutions. Rates and terms vary by applicant and market conditions. We do not offer any guarantees for the loan products or services mentioned on the site, and we recommend that you carefully read the terms and conditions of a financial institution when making a decision on a loan product.