Best auto credit rates for September 2021


Final verdict

Getting a low auto loan rate can help you avoid spending more than you should on your new or used car. Before you start shopping for a vehicle, it’s important to get quotes from several different lenders. Consider looking to credit unions, banks, and private lenders for the best rates.

If you don’t know where to start, we recommend getting a quote from PenFed Credit Union. Although you need to be a member, joining is easy and the credit union offers some of the lowest rates we’ve found along with flexible loan limits and repayment terms.

Compare the best auto loan rates

Lender Lowest rate Amount of the loan terms
PenFed Credit Union

Best overall
0.99% $ 500 to $ 100,000 36 to 84 months

Best online car loan
2.49% $ 5,000 to $ 100,000 24 to 84 months
Bank of America

Best Bank For Auto Loans
2.39% $ 7,500 + 12 to 75 months
Consumer Credit Union

Best Credit Union For Auto Loans
2.24% No minimum or maximum 0 to 84 months
Automatic tracking

Ideal for used cars
Not announced $ 4,000 to $ 600,000 24 to 72 months

Best for bad credit
2.49% $ 8,000 to $ 100,000 24 to 72 months

Ideal for refinancing
1.99% $ 2,500 to $ 100,000 24 to 84 months

Best for fair credit
Not announced Any car they sell 36 to 72 months

Auto loan rate by credit score

Credit score Average APR (new car) Average APR (used car)
781-850 3.24% 4.08%
661-780 4.21% 6.05%
601-660 7.14% 11.41%
501-600 11.33% 17.78%
300-500 13.97% 20.67%

Source: Experian: State of the Auto Finance Market Q2 2020

How do auto loans work?

Auto loans are secured loans. The loan is repaid in equal installments over a predetermined period of time. Typically, the vehicle you buy is used as collateral, which means the lender can seize the car if you don’t pay back the loan.

What should you consider when choosing an auto loan?

There are a lot of things to consider when choosing an auto loan. Your credit score, for example, has a major impact on the rates you get. The best rates usually go to those with excellent credit. At the end of the first quarter of 2021, the average credit score was 734 for a new car loan and 663 for a used car loan, according to an Experian report.

In the second quarter of 2020, borrowers who received the lowest rates had a score of 781 or higher. These borrowers, also known as super-prime borrowers, received an average APR of 3.24% for new cars and 4.08% for used cars. Principal borrowers with a credit score between 661 and 780 received an average APR of 4.21% for new loans and 6.05% for used loans, while non-senior borrowers with credit scores included between 601 and 660 received an average APR of 7.14% for new auto loans and 11.41% for used.

It is also important to consider which term matches your financial situation. Longer terms usually have lower payments, but cost more over the life of the loan.

How to get a car loan?

Some consumers can pay cash for a new vehicle, but most use financing from a bank, credit union, non-bank auto lender, or dealership. Here are the steps to follow to obtain a car loan:

  1. Check your credit report and correct any errors. Your credit score determines the interest rate you will receive.
  2. Shop around for several lenders, including major banks, community banks, credit unions, and online lenders. Compare rates, terms, credit score requirements, and other factors.
  3. Apply and get pre-approved for a loan from multiple lenders to see which offer is the best. Keep in mind that any credit application that takes place within 14-45 days only counts as one credit application, so it’s best to do all of your loan purchases within a short period of time.
  4. Find your vehicle and compare the dealership’s financing offer to your pre-approval offer.
  5. Finalize the offer with your lender, follow the instructions and complete the documents to complete the loan transaction. Make sure the loan is what you agreed to. Check the APR, the amount financed and finance charges before signing the loan.

Should you get a car loan from a bank or dealership?

It’s worth shopping around at banks and dealerships for a car loan. New car dealers and manufacturers, as well as banks, can offer attractive loan products. Depending on the borrower’s credit rating and market circumstances, the interest rate offered by a car dealership can be as low as zero percent or lower than the going rates offered by banks.

It is important to keep dealer financing as an option, but be sure to research auto financing before deciding where to buy a car. Know your credit score and search online for rates from banks and other lenders. This should give you an overview of what to expect in the open market and help you determine if seller financing is a better deal for you.

What is the term of auto loans?

It is common to see auto loans of 24, 36, 48, 60 and 72 months. The terms can be up to 84 months.

In the first quarter of 2021, the average credit for a new vehicle was 69.50 months.

Can You Refinance a Car Loan?

Yes, many lenders offer auto loan refinancing opportunities, and several promise to make the process quick and easy. There are a number of different circumstances that can pay off to refinance your loan. For example, you might be able to improve your rate and monthly payment, shorten your loan repayment term, or extend the term if you’re having trouble making your payments.

Can you sell a car with a loan?

It is possible to sell a vehicle while you still have a loan, but this adds a few more steps. There are a few different options in this situation. One option is to repay the loan in full before selling the vehicle, which involves contacting your lender to determine your repayment amount. After paying off the loan, your lender will release the lien.

You can sell a financed vehicle without paying it back by selling it to a private buyer or trading it in with a dealership.

What is the difference between an auto loan and a personal loan?

It is possible to use a personal loan or an auto loan to finance a vehicle, but the two differ in some important points:

  • Goal: Personal loans are unsecured or unsecured and can be used for many different purposes, including financing a vehicle, paying for vacations, or making improvements to a home. However, auto loans are used strictly to finance a vehicle and are secured by the vehicle you purchase. The vehicle serves as a guarantee.
  • Interest rate: As auto loans are guaranteed, auto loan rates are generally lower than those for personal loans.
  • Availablity: Auto loans are generally easier to obtain than personal loans, especially for those with bad credit history.


To select the lenders on this list, we evaluated loan offers from 25 different auto lenders using several criteria. First, we looked at auto loan rates, especially the APR, and the loan options available to borrowers. We also took into account loan amount ranges, types of loans offered, repayment term options, and credit score requirements. Only companies with a solid reputation were considered. Finally, we looked at customer service satisfaction and the national reach of each lender.


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