Best Auto Loan Rates in June 2026
See today’s best auto loans — new car rates start at 3.39%
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- Average car loan offers range from 6.81% to 23.82% APR, according to LendingTree data. Car interest rates depend on your credit and whether you’re buying new or used.
- You can get a car loan with bad credit, but it’s more expensive — rates are a little over 15 percentage points higher on average than rates for people with excellent credit.
- Average new car loan offers on LendingTree are about 2% lower than used car loan offers.
- Lenders can offer you very different rates for the same auto loan — even if your credit score doesn’t change. Comparing offers from several lenders and choosing the cheapest one can save you $2,346 on average.
What are current auto loan rates?
Your credit score helps determine the annual percentage rates (APRs) you’ll be offered. Use the average APR offered on the LendingTree marketplace for your credit band to see what a good auto loan rate is right now.
| Credit score range | Average new car APR | Average used car APR |
|---|---|---|
| Excellent (800 and above) | 6.81% | 7.92% |
| Very good (740-799) | 6.83% | 7.59% |
| Good (670-739) | 8.22% | 10.75% |
| Fair (580-669) | 19.15% | 21.13% |
| Poor (Under 580) | 22.11% | 23.82% |
Not sure where you stand? Check your credit score for free with LendingTree Spring. We’ll also give you personalized recommendations to improve your credit score and qualify for lower rates.
How much will my car payments cost?
Make sure you can afford your car payments by using the averages from the table above to estimate your payments with the LendingTree auto loan calculator.
Can I really afford this car?
Your monthly payment is only part of the cost of owning a car. LendingTree research shows that drivers spend an average of about $376 per month on insurance, fuel, repairs and taxes. Costs vary widely by location — see average car ownership costs in your state.
Factoring in these ownership costs before you buy can give you a more realistic picture of how much you can comfortably afford and help you avoid financial stress down the road. LendingTree research also shows that 5.1% of Americans with car loans struggle to keep up with payments. Taking an honest look at your budget now can help you avoid a similar outcome.
Need more help? Use the LendingTree car affordability calculator to estimate how much you can afford to spend on your car based on your desired monthly payment.
Should I get a car loan?
- Your payment fits in your budget, with room to spare for emergencies
- You need a car right now or can comfortably afford one
- You’ve compared offers from several lenders to find the best price
- You can’t afford current high car prices (consider used cars and leases)
- You have bad credit and can afford to wait (improving your credit could save you thousands)
What to do when you can’t afford a car loan
Got an offer but can’t afford the monthly payments? Here are some strategies to make your payments cheaper.
- Taking time to improve your credit before you buy could save you thousands of dollars on your car loan. But you’ll need to wait to buy your car, and improving your credit likely means making sacrifices to pay off debt.
- Getting a longer loan term will likely make your monthly payments cheaper, which could be necessary if you need a car now. Just know that you’ll pay more money in interest over the course of your loan using this method.
- Shopping around for a car loan just means getting offers from several different lenders and comparing them to find the cheapest one. LendingTree research shows that borrowers in every credit band can save thousands of dollars using this strategy.
How LendingTree works to get you the cheapest auto loan rates
You could save an average of $2,346 on your car loan by using the LendingTree marketplace to shop for loans and then choosing your cheapest offer. LendingTree makes it easy. Instead of applying to just one lender and hoping for a good rate, see multiple lenders compete for your business — so you can choose the best offer.
Tell us what you need
Take two minutes to tell us who you are and how much money you need for your vehicle — we’ll take care of the rest. It’s free, simple and secure.
Shop your offers
We’ll send you offers from up to five trusted lenders. Compare your offers side by side to see which one will save you the most money.
Get your money
Finalize your loan with your lender, and you’ll be on the road in no time. You could see money in your account in as soon as 24 hours.
Best auto loans
| Lender | Starting APR | Term | Amount | |
|---|---|---|---|---|
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9.99% (suffix text) | Not specified | Not specified | |
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9.99% | Not specified | Not specified |
Learn more about how we made our picks for the best auto loans.
Best for: Bad credit used car loans — CarMax
- Starting APR (suffix text)
- 9.99%
- Can buy a car online and get it delivered to your house or pick it up at a store
- You have up to 10 days to decide whether you want to keep the car
- Comes with a limited warranty that lasts up to 90 days or 4,000 miles
- No minimum credit score requirement
- Can only use Southeast Financial loans to buy Southeast Financial cars
- Car delivery not available everywhere
- Test drives aren’t allowed on home deliveries
- Can’t negotiate car price
Buying a car online can be stressful, but Southeast Financial’s 10-day guarantee might put you at ease. You have up to 10 days to return the car to Southeast Financial if it’s not a good match. You’ll just have to bring it back in the same condition it was in when you bought it.
Plus, every Southeast Financial car comes with a 30-day limited warranty, and in some states, your warranty could last 90 days or 4,000 miles.
Southeast Financial has a used car website in addition to brick-and-mortar stores. You can buy a car online and, as long as you live close enough, get your car delivered to your door. If you want to test drive it before buying, though, you’ll have to go to the dealer.
Southeast Financial doesn’t have a minimum credit score requirement, but you may need to provide documents like proof of income and proof of residency.
Also, you can only get a Southeast Financial loan if you’re buying from Southeast Financial. Southeast Financial does business in most states. Check the Southeast Financial website to see if your state is one of them.
Best for: A quick and easy car loan experience — LightStream
- Starting APR
- 9.99%
- Get money as soon as the same day you apply
- No restrictions on year, make, model or mileage
- Does not require a down payment
- Don’t need to have a specific vehicle in mind when you apply
- Must have good to excellent credit to qualify
- Can’t check rates without affecting your credit
- Higher rates than most traditional auto loans, since you aren’t using your car as collateral
As long as Southeast Financial approves you and you complete the necessary steps by 2:30 p.m. Eastern time on a business day, you could get your money on the day you apply. Plus, Southeast Financial doesn’t require appraisals and doesn’t have any vehicle restrictions. In short, Southeast Financial’s auto loan process is easier than that of traditional lenders.
Southeast Financial auto loans are unsecured — that means Southeast Financial doesn’t use your car as collateral, as is the case with a traditional auto loan. However, Southeast Financial’s rates are a little higher than others on this list. (In contrast, collateral loans typically come with cheaper rates because they’re less risky for the lender.)
Southeast Financial doesn’t specify its exact credit score requirements, but you’ll need to have good to excellent credit to qualify. Most of the applicants that Southeast Financial approves have the following in common:
- At least five years of on-time payments under a variety of accounts (e.g., credit cards or auto loans)
- Stable income and the ability to handle paying their current debt obligations
- Savings, whether in a bank account, investment account or retirement account
Understanding auto loans and car interest rates
How does car financing work?
If you don’t have the money to pay for your car in cash, financing lets you borrow what you need now and pay for it over time.
Here’s how it works: Your lender will pay the dealership or private seller for your car, and you’ll pay the lender back in regular monthly payments plus interest.
Your loan term directly affects how much money you pay in interest. In general, longer loans cost more overall. In fact, borrowers with auto loan terms over six years pay nearly $6,000 more interest on average than those with shorter loans, according to LendingTree research.
Your annual percentage rate (APR) also plays a major role in how much you’ll pay overall. Lenders typically offer lower rates to people with strong credit scores, credit histories and incomes.
What do I need to get a car loan?
- Credit score: It usually takes good credit (670+) for an affordable car loan. It’s possible to qualify with a lower score, but rates will be higher.
- Credit history: Auto loan lenders often like to see at least two years of positive credit history, preferably one that includes a past auto loan.
- Debt-to-income ratio: Debt-to-income (DTI) ratio measures how much you earn compared to your current level of debt, like credit card debt, mortgage/rent and auto loan debt. The best rates usually require a DTI of 35% or less, but some lenders accept a DTI of as high as 46% to 50%.
- Loan-to-value ratio: Auto loan lenders generally prefer a loan-to-value (LTV) ratio of 80% or less. LTV compares how much you’re borrowing to the actual cash value of the vehicle you’re financing. Higher LTVs generally mean higher auto loan rates.
- Paperwork: If you’re financing through the dealer, bring your government-issued ID and an insurance declarations page showing full coverage. Some dealers may require proof of income or residency, so you may want to call ahead to avoid multiple trips.
Why car loan rates vary
- Your credit history and credit score: If your credit score is 669 or below and you have little to no credit history, expect higher car interest rates.
- Used car loans versus new car loans: Used car loans usually carry higher rates than new car loans. Used car loans are riskier for lenders because used cars are harder to value and don’t depreciate in value as predictably as brand-new cars.
- Long loan terms versus short loan terms: Longer loan terms typically have lower monthly payments since you have more months to spread your balance across. In return, rates are higher since you have more time to fall behind on car payments.
- Down payment versus no money down: Making a down payment reduces your LTV, which in turn can bring down your car loan rate. The 20/4/10 car-buying rule says you should make a down payment of at least 20%.
- Lender variability: Not unlike car insurance companies, every auto loan lender has its own way of calculating rates. Shopping around can ensure you get the best rate possible.
How to get the lowest auto loan rates
According to a LendingTree study, improving your credit score from fair (580-669) to very good (740-799) could save you more than $2,316 on your auto loan over time.
Improving your credit score isn’t the only way to get a better car loan rate. You could also:
- Buy a car that qualifies for special financing: If you’re open to captive financing, then shop only for years, makes and models that have a special financing offer.
- Use a car-buying service: Your current bank or credit union might offer a car-buying service and discount.
- Buy during the holidays: Car manufacturers often run special financing deals at the end of the year and during the holidays, so you could try to time your buy.
- Use a loan comparison service: With LendingTree, you can compare auto loans from up to five lenders, and comparison is key to finding the lowest rates. Plus, nearly 9 in 10 LendingTree users get at least one auto loan offer.
- Get preapproved: Get a preapproved car loan and ask the dealer if they can do better. The dealer might be motivated to get you a cheaper rate in order to sell you a car.
Prequalification is often the first step when shopping for a car loan. It doesn’t hurt your credit and can help you decide which lenders are worth getting preapproved for.
Preapproval is as close to a car loan as you can get without actually finalizing your offer. It provides more accurate rates, but requires a hard credit pull. Get your preapprovals done within 14 days of each other to minimize damage to your credit.
How are tariffs affecting car prices?
Tariffs are raising car prices, even for cars manufactured in the U.S. Here’s what you need to know:
- There is currently a tariff of about 25% on cars built outside of the United States, but the exact rate varies by country.
- Car buyers can expect to pay up to $6,000 more for new cars that cost less than $40,000, according to .
- Car parts are also subject to tariffs, so even domestic brands are impacted. No vehicles are 100% manufactured and assembled in the United States.
- Used car prices aren’t directly affected by tariffs, but demand for used cars may rise as people look for cheaper cars. This could push used car prices higher.
What does this mean for you?
It’s more important than ever to shop for a good deal on your car loan. A lower interest rate can help you offset the higher cost of buying a car right now.
Car loan terminology
- APR: An annual percentage rate (APR) measures the total cost of your loan, including interest and fees. The lower your APR, the cheaper your loan.
- Loan amount: Most auto loan amounts start at several thousand dollars. If you want to finance a cheaper used car, make sure the lender’s loan amounts fit your needs.
- Financing term: Your financing term is the length of time you have to pay off your loan. Terms between 12 and 84 months are the most common. Long car loans typically have lower monthly payments, but you will pay more total interest.
- Doc fees: Doc fees are intended to cover the costs the dealership or lender incurs for filing paperwork. While you can sometimes negotiate dealer fees, you’ll often have better luck simply choosing a lender that charges lower fees to reduce your overall costs.
- Dealer reserve: Dealer reserve applies to indirect auto loans. When a dealer shops for financing on your behalf, lenders provide the dealer with a “buy rate.” The dealer can then mark up that rate to earn a profit for the dealership.
- Well-qualified buyers: A well-qualified buyer is someone who qualifies for the best special financing deals on captive auto loans. There’s no single definition of a well-qualified buyer, but it usually requires a 740+ credit score, stable income and a DTI below 35%.
Ways to save money on your car
You may have heard that negotiating at the dealership is the best way to save on a car, but real savings can happen before you ever set foot on the lot. You can avoid overpaying for your car by:
- Improving your credit before applying. People save $2,316 on average on auto loans when they improve their credit from “fair” to “very good,” according to LendingTree research.
- Shopping around for insurance. Comparing quotes pays off. In fact, 92% of Americans save money when switching car insurance carriers, according to LendingTree research.
- Choosing a shorter loan term. Shorter loan terms typically come with lower total borrowing costs. Just know you’ll have higher monthly payments in the meantime.
- Shopping around for a car loan. Comparing car loan offers on LendingTree and choosing the one with the lowest rate saves people more than $2,300 on average.
- Choosing used or certified pre-owned. Used cars cost about half as much as new cars on average, according to Kelley Blue Book data.
- Making a bigger down payment. Putting more down now means spending less on interest across your loan term. Aim for a down payment of at least 20% for a new car or 10% for a used car.
- Looking for car rebates and deals. Car manufacturers often offer rebates (money back) and financing deals to get buyers in the door. You could qualify for one of these discounts if you’re a recent college grad, military member, first responder or employee of an affiliated company. Also, keep an eye out for seasonal 0% APR car deals on certain new car models.
Learn more about how to get a smaller car loan.
How we chose our picks for best auto loans
We reviewed 25 auto lenders to determine the overall best 10 auto loan lenders. To make our list, lenders must offer auto loans with competitive APRs. From there, we prioritized the following factors:
Accessibility: We chose lenders with auto loans that are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding, and easier and more transparent prequalification, preapproval and application processes.
Rates and terms: We prioritize lenders with more competitive starting fixed rates, fewer fees, and greater loan options for repayment terms, amounts and APR discounts.
Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that have self-service payment options (like a mobile app), provide reliable customer service and offer unique perks.
According to our systematic rating and review process, the best car loans come from , , , , , Southeast Financial, , Southeast Financial, and . LendingTree reviews and fact-checks our top lender picks on a monthly basis.
LendingTree partners with dozens of auto lenders, but partners and non-partners receive equal treatment in our scoring and review process. Read more about our editorial guidelines and standards.
Frequently asked questions
We’ve named the best car lender overall. That said, the best place to finance a car is with the lender that offers you the lowest rates. You can compare rates from real offers on the LendingTree marketplace in minutes.
If you don’t mind using a TrueCar car-buying service, PenFed is currently offering the lowest auto loan rates of all the lenders we’ve reviewed ( for new cars, and for used cars).
If you don’t want to use a car-buying service,
But remember that only the most qualified buyers get the lowest APRs, so your rate may be higher.
Choose a car loan term of four years or less whenever possible. Shorter loan terms typically come with the lowest rates, and you’ll pay less overall interest.
A shorter loan term also helps to protect you against an upside-down car loan. The longer it takes you to pay off your car, the more time your car has to depreciate.
Use our auto loan calculator to see how different term lengths can impact your monthly payment.
According to LendingTree’s most recent data, the average auto loan interest rate for a 700 credit score is 8.22% if you’re buying a new car. If you’re buying used, 10.75% is the average.
Lenders also consider your income, repayment term, credit history and other factors to determine your auto loan rate. Your rate could be higher or lower depending on your situation.
New cars cost about $49,000 on average, while used cars cost about $25,000 on average, according to Kelley Blue Book. You’ll also need to budget for other costs of owning a car, like fuel, maintenance, taxes and insurance.
Learn about the smarter and cheaper way to buy a car.
You can usually negotiate your rate, but it depends on where you’re buying your car. Some dealerships, including Southeast Financial, don’t negotiate. But most dealerships are willing to haggle. Consider getting preapproved for a car loan and asking the dealer to beat the preapproved rate.