Aside from choosing the perfect ride, buying a car also means finding the right financing. The loan you choose determines your monthly payments and the total amount you pay over time. Therefore, it’s just as important as the vehicle itself. With so many lenders offering different starting rates and terms, it can be difficult to know where to start.
To help narrow down your search, below are five top-ranked lenders offering the lowest auto loan rates.
1. PSECU
PSECU is a credit union headquartered in Harrisburg, Pennsylvania, that offers some of the lowest auto loan rates. You can access APR as low as 5.19% for new and used auto loans, and 4.68% for auto refinancing. Loan terms stretch up to 96 months, so you have the flexibility for both short- and long-term plans. As stated on its website, “we’re member-owned and not-for-profit, which means fewer fees and more benefits for you.”
Key Features
- Speedy approval with online application
- Financing ranges from 100% to 125%
- Recognized as a Top Auto Lender in Pennsylvania
2. Capital One
Capital One offers auto loan rates as low as 5% on new cars, with loan terms up to 84 months. The loan amounts start at $4,000, so it’s suitable for a range of budgets. One of its main advantages is accessibility, with a low minimum monthly income requirement of $1,500-$1,800. There are also no early payoff fees, and its Auto Navigator tool allows you to browse vehicles from participating dealers on its website or mobile app.
Key Features
- Auto Navigator tool to browse inventory online
- Low-income requirement, starting at $1,500
- Fast approvals, sometimes within minutes
3. PenFed Credit Union
With PenFed Credit Union’s car-buying service, rates can start as low as 3.39% for new cars and 4.34% for used cars. However, rates remain low even without the service, starting at 4.19% for new cars and 4.79% for used cars. Loan amounts at PenFed range from $500 to $150,000, with up to 125% financing of your vehicle’s value. It also provides flexible terms to fit your budget, typically up to 84 months.
Key Features
- Some of the lowest interest rates available in the market
- Car-buying service with pre-negotiated pricing
- Fully online application process
4. Bank of America
Bank of America is a great option if you’re looking for a more traditional lending experience. Its auto loan rates start as low as 5.29% for new cars and 5.49% for used cars. When applying online, you can choose from 48, 60 or 72-month terms, with other options available through a loan officer. The bank also offers a helpful 30-day rate lock, giving you time to shop for vehicles.
Key Features
- Interest rate discounts up to 0.50% for eligible members
- 30-day auto loan rate lock guarantee
- Quick decision with no-fee application
5. Navy Federal Credit Union
Navy Federal Credit Union has highly competitive auto loan rates, with APRs as low as 3.89% for new cars and 4.79% for used cars. Loan terms extend up to 96 months, which is one of the longest available. The credit union also allows co-signers and co-borrowers, and most decisions are made within seconds. Plus, there are no maximum mileage restrictions or strict limits on where you can purchase.
Key Features
- Exclusive rate discounts for military members
- 100% financing available
- Loan terms up to 96 months
Quick Comparison Table
Here’s how the five lenders compare side-by-side.
| Lender | Starting APR | Loan Terms | Notable Feature | Best For |
| PSECU | 5.19% | Up to 96 months | Up to 125% financing | Low loan amounts and flexibility |
| Capital One | 5% | Up to 84 months | Auto Navigator tool | Easy online shopping |
| PenFed Credit Union | 3.39% (with car buying service) | Up to 84 months | TrueCar integration | Lowest overall rates |
| Bank of America | 5.29% | 48 to 72 months, other options available | 30-day rate lock | Traditional banking |
| Navy Federal Credit Union | 3.89% | Up to 96 months | Rate discounts for military members | Military borrowers |
Methodology for Determining Top Lenders
This list considers a range of factors that influence both affordability and accessibility to identify who offers the lowest auto loan rates. Starting APRs are a top consideration, since these directly affect the total cost of the loan. Other factors include loan terms, fees, eligibility requirements and the overall borrowing experience.
It’s worth noting that advertised rates can fluctuate and are typically reserved for borrowers with excellent credit. Your actual rate will depend on your credit score, income, debt levels and the vehicle you plan to finance.
Frequently Asked Questions
The following are some commonly asked questions about the lowest auto loan rates.
Q: What is considered a good auto loan rate?
A: A rate below 5% is generally considered good, while anything around 6% to 7% is closer to the market average.
Q: How can you qualify for the lowest auto loan rates?
A: Lenders usually reserve the best auto loan rates for borrowers with credit scores above 700, stable income and low debt levels. Choosing a shorter loan term can also help secure a lower rate.
Q: Is prequalification important?
A: Yes, prequalification allows you to compare offers without affecting your credit score. Therefore, it helps you find the most competitive deal.
Drive a Better Deal
The five lenders above offer some of the lowest loan rates today. Take the time to review offers, check prequalification options and look closely at the full loan terms to make an informed decision. An up-front comparison can go a long way toward helping you secure a deal that works for you over time.
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