Lenders compete with one another by offering low interest rates to what they consider dependable borrowers. Currently, the best auto loan rates for new vehicles are about 2.5% and under. Many providers offer rates like this, including credit unions, banks, and online lenders.
In this article, we’ll talk about the five best providers for low auto loan rates and go over how you can find good financing terms. When shopping around for auto loans, it’s a good idea to compare pre-qualification offers from several top lenders.
5 Providers With the Best Auto Loan Rates
In the table below are five top providers with the best auto loan rates in 2021. Based on our research, PenFed Credit Union currently offers the lowest annual percentage rate (erica and myAutoloan also offer some of the best rates and financing terms.
Be aware that the lowest rates are available for borrowers with the best credit. In other words, the minimum credit score is the minimum needed to qualify for auto financing from the particular lender, not to get the lowest interest rate. Also, interest rates change frequently. The information presented here is current as of the time of publication.
PenFed Credit Union
PenFed Credit Union has one of the lowest annual percentage rates of any bank, credit union, or loan company at this time. The advertised rate is 1.04%, but not just anyone websites can get rates that low. This rate applies to people who use PenFed’s car buying service to purchase a new vehicle with a 36-month loan term. PenFed Credit Union works with TrueCar to show you vehicles in your area, and the low APR is an incentive to use this shopping process.
If you purchase a vehicle without using this buying service, loan rates start at 1.79%. Used car loans start at 1.64% using the buying service and 2.39% otherwise. These are still the best auto loan rates compared to other lenders’ rates for new and used vehicles. PenFed Credit Union requires membership and a $5 deposit. You can become a member through a variety of organizations or simply by expressing interest in joining.
Bank of America
Bank of America offers a new car loan APR of 2.39% to borrowers with excellent credit, which beats out many other lenders by a tenth of a percent. Used car rates start at 2.59%, and if you’re refinancing an existing loan, refinance loans start at 3.39%. Bank of America Preferred Rewards members can also get an interest rate discount of up to 0.5%. As a national bank, Bank of America works with a huge variety of dealerships across the country, which means you don’t have to limit your options.
Be aware that Bank of America won’t finance vehicles older than 10 years or with more than 125,000 miles on the odometer. It also won’t finance cars under $6,000 in value or alternative vehicles like motorcycles and RVs.
MyAutoloan
MyAutoloan is an internet-based lender that has been around since 2003, and it offers low rates that start at 2.49%. The company has a 4.3 out of 5.0-star rating from over 700 customers on Trustpilot and an A+ rating with accreditation from the Better Business Bureau (BBB). Borrowers need a minimum credit score of 575 to qualify. This is a lower credit score requirement than many other top lenders, making myAutoloan a good option for people who need to secure a bad credit car loan.
One thing that makes myAutoloan different from the previous two companies above is that it’s an online marketplace where you can see rates from multiple lenders at once. It’s always a good idea to do some comparison shopping to find the best auto loan rates, and you can save some time with myAutoloan. Be aware that you need to borrow at least $8,000 when using myAutoloan.