Buying a used car is often a better value because they’re cheaper, and you can avoid the big depreciation hit that comes with driving a new car off the lot. However, arranging the financing for a used car is a very different story. Used car loans typically come with higher interest rates and have more restrictions on the type of car you can buy compared to new car loans. But there are still good options—we’ve compiled the best used car loan companies, based on rates, terms, and fees, to help you find the right loan for your vehicle. Need an auto loan refinance, or a new car loan? See the best auto loan rates from a broader selection of lenders. Best Used Car Loans Best Used Car Loans Final Verdict How to Choose FAQs Other Types of Auto Loans Methodology Pros & Cons Pros Can shop with a check in hand with certain dealers Allows private-party vehicle purchases Discount if you set up autopay from a PNC account Cons Doesn’t offer pre-qualification Doesn’t allow co-signers, only co-borrowers Must apply in-branch for private-party purchases Why We Chose It PNC Bank has several flexible options to help you buy a used car depending on where you’re purchasing it from. If you’re buying from a dealer, you can apply for a traditional used car loan, or you can apply for a PNC Check Ready loan that allows you to bring a blank check to a car dealership directly, with the idea that you can walk off the lot as soon as you find the right ride. If you’re buying from a private party, however, you’ll need to apply in person at a branch location. If you set up autopay from a PNC Bank account, you’ll also get an additional 0.25% discount off your rate. Unfortunately, you’ll need to be relatively sure you’re eligible for approval with this bank because you can’t apply with a co-signer (you can apply with a joint applicant, however), and you’ll need to submit a full loan application including a hard credit check. Try limiting your rate shopping to a two-week period so you can reduce the negative impact of having multiple hard credit inquiries listed on your credit reports. Borrower Qualifications Vehicle Qualifications Pros & Cons Pros No mileage or age caps Offers TrueCar car buying service Offers 24-hour mechanical repair coverage Cons Requires you to join the credit union Doesn’t allow private-party vehicle purchases Not very transparent about loan requirements Why We Chose It Consumers Credit Union is an especially good choice if you‘re trying to buy an older or high-mileage vehicle from a dealer. Unfortunately, the credit union doesn’t allow you to use loan funds to buy a used car from a private seller, like someone off Craigslist. Aside from its relatively open-door policy to new members and its loose age and mileage requirements, Consumers Credit Union doesn’t provide much information about what you’ll need to qualify for a loan. The credit union offers the TrueCar car buying service, which can help you save up to $1,824 off of the MSRP for a new car, although you can use the service to buy a used car too. If you sign up for autopay on your loan, you can get a 0.25% discount. And if you’re worried about breaking down, Consumers offers optional-to-purchase ForeverCar mechanical repair insurance. Borrower Qualifications Vehicle Qualifications Pros & Cons Pros No payments for the first 45 days Potential for lowest possible rates Allows private-party vehicle purchases Cons Doesn’t provide many loan details Doesn’t allow co-signers, only co-borrowers Doesn’t disclose lenders in its partner network Why We Chose It AUTOPAY is one of our top lenders thanks to the ultra-low rates it advertises. If you’re able to qualify for those low rates, it could be the cheapest loan you’ll find anywhere. Presumably, you need excellent credit and a high income to qualify, but since AUTOPAY provides only a few details about its used car loans, it’s impossible to say. AUTOPAY is a used car loan marketplace that matches you up with a lender. Unfortunately, AUTOPAY doesn’t disclose how many lenders it works with or what their requirements are for getting a loan, so it’s a bit of an unknown. Still, it can’t hurt to apply and see what rates you may qualify for. And if nothing else, you won’t have to make any payments on the loan for the first 45 days. Borrower Qualifications Vehicle Qualifications Pros & Cons Pros Maximum loan-to-value (LTV) ratio of 140% No down payment needed Seamless loan with certain dealerships Quick loan decision times Cons Doesn’t allow co-signers, only co-borrowers Doesn’t allow private-party used car purchases Can only be used at a Chase network dealership Why We Chose It Chase offers auto loans with an exceptionally high loan-to-value ratio of 140%. Why is this important? You may need to borrow more than the value of the vehicle to help pay for the typical extras, like taxes and title/license fees. The downside of Chase used car loans is that you can only use them to buy a car from a dealership that’s already in Chase’s partner network. While Chase doesn’t say how many dealerships this is, the good news is Chase is the largest bank in the country, so your odds are better than with a less well-known bank. This loan requires the bank and the seller to already be linked up, so that means a smoother loan transition for you. You can shop for a car online, get your loan details all dialed up, and then simply go to the dealership to test-drive the used car to make sure it’s what you want. If it’s not, no worries; you can simply transfer the loan to another car. Borrower Qualifications Vehicle Qualifications Customer Reviews* *Customer reviews were collected from an independent Investopedia survey of 1,016 current, past, and prospective auto loan borrowers. Pros & Cons Pros Ultra-low interest rates No payments for the first 60 days No limits on vehicle mileage or age Cons Slow funding times Doesn’t offer any discounts Doesn’t allow private-party car purchases Why We Chose It NASA Federal Credit Union is designed to benefit NASA employees, but it allows anyone to join by giving them a free one-year membership to the National Space Society. It’s another good choice if you're trying to purchase an older or higher-mileage car from a dealership because this credit union has no restrictions on those common blocking points for used car loans. You’ll need to have a bit more patience with this credit union, however, because it can take three days to receive your funds (versus one day for most other lenders). It does offer the nice perk of not requiring any payments for the first 60 days. However, this isn’t as helpful as you might think because interest still accrues during this time—the very point when your interest payments are the highest they’ll ever be for this loan (because the balance is at its biggest). Borrower Qualifications Vehicle Qualifications Pros & Cons Pros Transparent lender network Low loan amounts available Allows private-party car purchases Cons Sparse details about loans May be personal loans, not auto loans High maximum APR for some borrowers Why We Chose It Credible offers a marketplace for used car loans where it can connect you with one of its 17 partner lenders that offer auto loans. Keep in mind that Credible is geared more toward the personal loan marketplace, and indeed some of its partner lenders don’t even advertise auto loans on their websites. You can use a personal loan to buy a car, which may be easier and would prevent your car from being repossessed if you default. However, these loans are usually far more expensive than regular used car loans. Another big downside is that Credible isn’t very open about its loan requirements. It doesn’t tell you what car requirements (if any) there are, whether non-citizens can apply, or what type of credit score you’ll need. The maximum rates you may end up paying if you don’t have good credit are higher than those disclosed by most other top lenders, for example (these rates may be for personal loans). Borrower Qualifications Vehicle Qualifications We like PNC Bank as a good all-around lender for just about every used car loan option since it offers low rates, widespread availability, and the option to quickly find and buy a car. If you prefer working with credit unions, Consumers Credit Union and NASA FCU offer loans with very few restrictions on the type of used car you’re buying, as long as you don’t mind buying from a dealership. If you’re looking to shorten your rate shopping, Credible and AUTOPAY are two great loan marketplaces. Used or pre-owned cars are exactly what they sound like: Before coming to you, they had at least one other owner. This differs from certified pre-owned cars, which dealerships often turn back into nearly tip-top shape complete with a warranty and other benefits. Since even a Model T can technically be considered a “used” car, most lenders have limits on how many years and miles your car can have on it before it’s ineligible for financing. Lenders want to make sure that your used car isn’t too old to do its main job of getting you around. You can get used car loans from most of the same places as a new car loan. Banks and credit unions are popular choices due to the low rates they offer (especially credit unions). Dealerships often arrange financing with banks and credit unions for a slightly higher rate, but you can negotiate this cost. Online lenders, including auto loan marketplaces, give you a wider range of options to find even lower rates yet. Used car loans can seem pretty similar at first glance, but it’s important to dig into the details. Here are a few good things to check on as you shop around for your used car loan: Car loans are some of the most common types of debt around, but that doesn’t mean they’re a good first choice if you need to buy a car. Here are some other options: Lenders generally look for the same things in a car loan applicant: a good credit score, consistent income, and proof of identity. Most lenders also have separate qualifications for the used car itself, such as a cap on age or mileage. The specific qualifications vary by lender. Some lenders will allow you to add a co-signer to your loan if you can’t get approved on your own, but this has big implications, so consider it carefully. Dealerships may charge higher rates than banks, but it’s also generally easier to negotiate a lower rate too. One exception is for buy here, pay here dealerships which target people with bad credit. These dealerships charge exorbitantly high rates on loans, which makes it easy to miss payments and wind up having your car repossessed. Yes, you can negotiate the price of your used car loan. You’ll need to shop around to get as many quotes as you can from a range of lenders. Then, take the best offers to the dealership to see if they’ll offer a lower rate, a lower car price, and/or a higher value for your trade-in. Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs.Best Used Car Loans of 2024
Best for an Easy Buying Experience : PNC Bank
Best for High Maximum Accepted Mileage : Consumers Credit Union
Best for Low Used Car Loan APR : AUTOPAY
Best for High Loan-to-Value Ratio : Chase Auto
Best Credit Union : NASA FCU
Best for Flexible Loan Terms : Credible
Final Verdict
Guide to Choosing the Best Used Car Loans
What Is a Used or Pre-Owned Car?
How to Compare Used Car Loans
Alternatives to Used Car Loans
Frequently Asked Questions
How Do You Qualify for a Used Car Loan?
Is It Better to Get a Used Car Loan From a Bank or a Dealership?
Can You Negotiate a Used Car Loan?
Other Types of Auto Loans
Methodology
FAQs
What is a good APR for a used car loan in 2024? ›
Credit Score | New Car Loan | Used Car Loan |
---|---|---|
750 or higher | 7.24% | 7.49% |
700-749 | 7.24% | 7.49% |
600-699 | 6.99% | 7.24% |
451-599 | 10.37% | 10.62% |
Auto loan rates for new and used vehicle purchases fell in the first quarter of 2024 to 6.73% and 11.91%, respectively, down slightly from the 15-year highs we saw at the end of 2023, according to Experian.
Who gives the best used auto loans? ›- Best for an Easy Buying Experience: PNC Bank.
- Best for High Maximum Accepted Mileage: Consumers Credit Union.
- Best for Low Used Car Loan APR: AUTOPAY.
- Best for High Loan-to-Value Ratio: Chase Auto.
- Best Credit Union: NASA FCU.
- Best for Flexible Loan Terms: Credible.
The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.
Which bank has the lowest car loan interest rate? ›I... Top Banks like Canara Bank, HDFC Bank, ICICI Bank, Punjab National Bank, and State Bank of India are providing the cheapest car loans. Canara Bank interest rates range from 8.80 percent to 11.95 percent. HDFC Bank car loans start from 8.75 percent.
Will car rates go down in 2024? ›McBride shares that while the high-rate environment will persist, rates will ease for most borrowers in 2024. Increased competition between lenders may help drivers secure a good rate.
What interest rate can I get with a 800 credit score car loan? ›Credit Score Range | New Car Loan Rates | Used Car Loan Rates |
---|---|---|
781 to 850 | 5.64% | 7.66% |
661 to 780 | 7.01% | 9.73% |
601 to 660 | 9.60% | 14.12% |
501 to 600 | 12.28% | 18.89% |
Lender | Starting APR | Award |
---|---|---|
1. MyAutoloan | 6.99% for 72-month auto loans | Best Low-Rate Option |
2. Autopay | 5.69%* | Most Well-Rounded |
3. Consumers Credit Union | 5.99% for 72-month loans | Most Flexible Terms |
4. PenFed Credit Union | 4.74% for 72-month loans | Most Cohesive Process |
Experts say that 2024 will be the best year to purchase a new car since 2019. As interest rates slowly drop throughout the remainder of the year, payments will become more manageable. Don't overlook manufacturer rate promotions, as they can save you thousands of dollars.
Which FICO score is used for auto loans? ›FICO Score 5 and FICO Score 8 are both common credit scores. Mortgage and auto lenders often use FICO Score 5, while credit card issuers typically use FICO Score 8.
What is the best type of loan for buying a used car from another person? ›
Besides paying cash, a personal loan could provide the money you need to buy someone's car. Personal loans also have minimum amounts you can borrow. The minimums vary by lender and by state but can be as low as $500 or $1,000.
What is the cheapest car loan right now? ›Top Auto Loan Lender | Lowest APR | Term Length |
---|---|---|
AutoPay | 4.67%** | 24 to 96 months |
PenFed Credit Union | 4.74% | 36 to 84 months |
Auto Approve | 6.24%** | 12 to 84 months |
Consumers Credit Union | 5.99% | Up to 84 months |
The exact credit score you might need to qualify for a 0% APR loan varies depending on your situation. Many lenders require a minimum score of at least 700. Others require excellent credit scores, such as 720, 750, or even 800.
What would payments be on a $25,000 car loan? ›Rates and terms are subject to change without notice. Example: A six year fixed-rate loan for a $25,000 new car, with 20% down, requires a $20,000 loan. Based on a simple interest rate of 3.4% and a loan fee of $200, this loan would have 72 monthly payments of $310.54 each and an annual percentage rate (APR) of 3.74%.
What is the monthly payment on a $30000 car loan? ›A $30,000 auto loan balance with an average interest rate of 5.0% paid over a 6 year term will have a monthly payment of $483. In total, the loan will cost $34,787 with $4,787 in interest.
What is the predicted interest rate for 2024? ›In fourth quarter 2024 outlooks, Fannie Mae analysts anticipate 30-year rates at 6.7 percent, while the Mortgage Bankers Association predicts 6.6 percent. The National Association of Realtors projects 6.7 percent.
What is a decent APR for a used car loan? ›Generally, a good APR for a car loan might look something like this: Excellent Credit (750+): 3% or lower for new cars, 4% or lower for used cars. Good Credit (700-749): 4-5% for new cars, 5-6% for used cars. Fair Credit (650-699): 6-7% for new cars, 7-8% for used cars.
Is 24% APR bad for a car loan? ›A 24.99% APR is not good for mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay and what most lenders will even offer. A 24.99% APR is reasonable for personal loans and credit cards, however, particularly for people with below-average credit.