Compare 5 Providers for New and Used Auto Loans
Mar. 19, 2023
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You're in the market for a car. Congrats! Compare some of the leading car loan providers below and choose the one that's right for you.
LendingTree
237 driversvisited this site today
PenFed
DriveTime
CarGurus
Lease End
Auto Credit Express
Credible
CarsDirect
connected with a lender in the past week
LendingTree
237 driversvisited this site today
Lenders help customers borrow money for a variety of purposes, and not surprisingly, one of these reasons is to buy a vehicle. In fact, because cars, motorcycles, and other modes of transport have become so integral to everyday life, auto loans written specifically for their purchase are becoming a popular form of financing.
Consumers who need a vehicle can approach a variety of lenders and receive different terms and car financing rates for their loan, which, in some cases, may be enough to buy the car from the dealership outright. In other cases, dealers themselves may offer loans, potentially giving people with no other options a way to become mobile even without the cash to do so. We recommend you review the chart below to and do as much research as possible to understand the best auto loans.
LendingTree is a marketplace where you can set your parameters and then receive a list of relevant loan providers. One of the perks of LendingTree is that you fill out one application and can then review multiple loan options.
Pros | Cons |
Vast network of loan providers may help you find competitive rates | Work with all types of credit |
Not directly a lender so rates and terms vary | Lack of information about specific loan types and terms |
MyAutoLoan is a lending marketplace that lets customers find the right loan solution for their auto purchasing or refinancing needs. The company has developed proprietary technology that can help them match lenders to borrowers based on their needs.
Pros | Cons |
Simple and efficient pre-qualification process | No offerings for borrowers with credit score of less than 600 |
Receive funds in as little as 24 hours | High minimum loan amount |
RateGenius is a middleman that connects you with relevant lending companies. It offers a streamlined application process and boasts a network of 150 lending institutions, which may give you the ability to find an ideal auto refinancing loan to suit your current situation.
Pros | Cons |
Experts help find the best refi rates | No new or pre-owned auto loans |
Straightforward and quick application | Focus exclusively on refinancing |
Transportation is crucial for working professionals, parents, and people young and old alike. Imagine how limited one’s money-making potential would be if they could only rely on their own two legs to deliver them to work. People would need to live in an urban environment for proximity to jobs, and would not be able to leave the public transportation network. Parents could not pick their kids up from school or drive them to soccer practice, and families would not be able to easily visit relatives in faraway places. Vehicles are necessary for giving people the freedom of mobility to get where they need to go with little effort.
Despite their importance, even the cheapest cars may still require an investment of thousands of dollars. This is one way auto financing companies can be useful - they may be able to provide customers with a loan for the explicit purpose of buying a vehicle, and, in some cases, can do so with affordability and flexibility.
What sets an auto loan apart from an all-purpose bank loan, mortgage, or line of credit?
One difference is that all auto loans are secured, meaning that the vehicle the loan is intended for typically serves as the loan’s collateral. Failure to make payments could result in the lender repossessing the vehicle to cover the rest of the obligation, but secured loans may also result in more favorable interest rates and loan terms.
Another major area that sets auto loans apart is their credit requirements. Generally, because a vehicle represents a smaller investment than a house or small business, and because it is obtained via a secured loan, the bar is set much lower. Those with low or poor credit may still be able to obtain a reasonable auto loan, whereas this may not be the case for other types of loans. Car loans are also comparatively short, typically lasting for a maximum of around 7 years. Some consider this to be less risky than other types of loans, and thus more favorable for customers.
Auto loans can also be quite flexible. Borrowers may be able to trade in old cars to reduce their obligations to a degree, pay on a more frequent schedule to speed up the timeline of their loan repayment and improve their car loan interest rates, or even take a loan that allows them to replace their car mid-term for a different model.
Before attempting to get an auto loan, it is highly recommended that you thoroughly explore your credit report. Each score from the Equifax, TransUnion and Experian credit reports may be relevant to how lenders view the creditworthiness of their potential borrowers, and therefore the terms and car loan rates they extend. By fixing erroneous entries that may reside on a credit report before applying for an auto loan, you could potentially save on your repayment term.
For those already shopping around for an auto loan, it is suggested that they think in terms of the total obligation and not just the monthly payment. While a monthly payment may be easier to consider, it does not account for maintenance, insurance, or other financial emergencies. Anyone can “afford” a new sports car in monthly payments, but they do not consider that it is only affordable because the duration of the loan has been lengthened to the maximum amount of time available. This heightens the risk of having an underwater loan near the end of the term, where the remaining amount owed is worth more than the car itself, not to mention that by this time the car is older and is likely to encounter more costs.
Another tip that we recommend is to use the dealership loans as a last resort. Dealers will grant almost anyone a loan, and tend to offer less than reasonable terms. In fact, most of the money that dealerships make off the sale of a car is not from the car itself, but rather the financing. For this reason, we recommend you to only consider a loan from the dealer after you have other offers to compare against.
Lastly, we suggest you to do thorough research! Experts will tell you to always check the Better Business Bureau, online reviews and even regulatory bodies before finalizing a loan. Even if you get an offer from one the best banks for auto loans, it's may be worthwhile to undergo this quality check.
When applying for loans from a variety of sources, we recommend you to complete the applications within 2 weeks of one another. This is because each application is a credit inquiry, which may temporarily lower a credit score. By doing them together, they will likely count as only a single inquiry, which can help keep credit scores healthy.
Shopping around may be necessary to obtain the best terms for a new or used car loan, so we suggest checking out all the local sources. This may include banks, online auto loan lenders, credit unions, peer-to-peer sources, or the dealership. Experts will say it's best to approach each lender with the offers of the others, because it takes competition for any market to produce the most ideal offer.
You can stir up the competition by getting proof of one’s on-paper offer. This is called pre-approval, which is basically a blank check from a single lender that illustrates how much they are willing to lend, and at which terms. If you bring your best auto loan pre-approval when dealing with another lender, they may try to match or eclipse the offer.
We recommend checking a few things in the loan contract before it is finalized. First on the list is prepayment penalties, which can restrict your ability to pay back the loan ahead of schedule. Those who make extra payments to reduce the term on their loans may be hit with fees that negate the efforts, so if paying off an obligation quickly is important to you, we suggest you check that this is not a feature in the contract before signing it.
Another potentially troublesome clause is called mandatory binding arbitration, meaning that if the lender and borrower get into a dispute, it will be settled out of a court of law by an arbitrator. This puts the borrower at a disadvantage.
Variable interest rates might also find their way into an auto loan agreement. These are not all bad, but can mean higher interest payments over the life of the loan depending on how rates evolve over time. Always calculate monthly payments based on the highest rate, if this is the case, or risk getting an unaffordable loan. Very low interest car loans are often variable rates, which may be a great bet for you, but can cost more long term.
Last, but not least, it is always important to make sure that any agreed upon changes to the contract make it into the final version.
PNC Disclaimer:
Annual Percentage Rates (APRs) for loans amounts from $5,000 to $100,000 with repayment terms from 12 to 72 months currently range from 5.74% to 22.04 %. Available rates within this range may vary by loan amount, repayment term and model year.
The lowest rates are available to well-qualified applicants. Your actual APR may be higher than the lowest available rate and will be based upon multiple factors such as credit qualifications, loan amount, repayment term, model year, automated payment from a PNC checking account and number of days to first payment.
APRs include a 0.25% discount for automated payment from a PNC checking account. Automated payment must be set up at loan closing to qualify for the 0.25% discount. If automated payment is discontinued, you may no longer receive an automated payment discount and your rate will increase 0.25%.
Model Years: Auto Loans to be secured by a 2014-2023 model year non-commercial vehicle with up to 100,000 miles. Repayment term restrictions apply for vehicles with model years 2014-2017. Certain restrictions apply for mileage from 80,000 to 100,000.
Credit is subject to approval. Certain restrictions and conditions apply. Rates are effective as of 11/13/2022 . Rates, terms and conditions are subject to change at any time. For more information, visit pnc.com/checkready.
Loan Payment Example: The monthly payment per $1,000 borrowed at 5.74 % APR for a term of 72 months would require 72 monthly payments of $16.45 based on 30 days to first payment. The monthly payment per $1,000 borrowed at 5.74% APR for a term of 12 months would require 12 monthly payments of $85.95 based on 30 days to first payment.
NOTE: The credit score ranges utilized to define "Excellent", "Good", "Fair" and "Poor " in the "Credit Score" drop down option are established by BestMoney.com as a guideline. Standards for rating credit scores and associated available rates may vary by lender.
