Looking to buy a used car with an auto loan? You’ve come to the right place. Did you know that, in a recent study, about 54% of borrowers did not originate their lowest available interest rate? In other words, based on their credit score they could have received a lower interest rate if they knew where to look.
Why? Many passed on researching and applying for multiple financing options, and it ended up costing them.
To ensure you get the best auto loan rate possible for your next used car with the least amount of work, here’s what to look for in a lender, our top picks for 2018, and a shortcut that makes shopping around quick and convenient.
9 things to look for in a used car loan lender
First things first, what should you be looking for in an auto lender when you are buying a used car? Here’s a quick checklist to keep on hand.
- Loan amount limits: The loan amount limits need to suit the amount you need to buy your used vehicle.
- APR: The APR you get offered should be competitive against other offers you receive.
- Fees: The fees should be low, non-existent, or at least competitive with other companies.
- Loan terms: There should be multiple loan term options ranging from 12 to 84 months.
- Customer service: The company should have a good-to-great customer satisfaction ratings from past customers.
- Accessibility: It should be easy to apply for, originate, and manage your loan. Online applications with a soft credit pull and direct deposit are ideal.
- Flexibility: The lender should allow you to buy from dealers and private parties.
- Restrictions: Any restrictions on the vehicle you can buy should be reasonable.
- Additional features: A great lender is going to go above and beyond the basics by providing you with features to make the car buying process easy.
In the end, the best auto loan for you is going to come from a lender that ticks as many of the boxes as possible.
First, you’ll need to figure out which lenders will lend to you and offer you the amount you need. Then, the next priority is getting a good deal so you’ll want to find a competitive APR.
Remember, it’s possible to get a low monthly payment with an extended loan term or high fees, which will end up costing you more. To get a good deal overall, remember to compare the total cost of various loan offers in addition to the monthly payment amount.
The best lender is going to be different for each person depending on their individual needs and circumstances. However, here are three top options for 2018!
2018’s 3 best auto loans for buying a used car
1) SpringboardAuto: Best overall
SpringboardAuto was founded in 2015 by finance experts aiming to streamline the auto loan process in the U.S. It is a direct lender and offers an online lending platform.
Borrowers can apply online without hurting their credit and can find out what they qualify for in minutes. Once pre-approved, they can use the ‘Loan Configurator’ to adjust their down payment amount and loan term to best suit their needs.
Once the loan is customized, the next steps are to upload the required documentation via a smartphone or desktop computer and sign the agreements using an electronic signature.
When buying from a private party, the final step is an in-person closing where SpringboardAuto sends a notary to meet the buyer and the seller at a place and time they choose. After the meeting, the funds are sent to the seller.
When buying from a dealer, SpringboardAuto coordinates with the dealer to deliver the car to the buyer and pay the dealer.
This company regularly receives excellent reviews from customers who appreciate the streamlined loan application process.
SpringboardAuto CEO, Jim Landy, says, “We offer prequalification — which doesn’t impact the applicant’s bureau score — instant credit decisions, full transparency into all of the transaction elements (to include tax and license), online self-serve features, and electronic loan documents.
The result is an empowering experience for our customer that enables them to spend less time at the dealer, improving the overall vehicle buying experience.”
- Loan amounts range from $7,500 to $45,000
- Loan terms up to 72 months
- Low minimum credit score requirement of 500
- Finances cars up to 15 years old
- Financing for purchases from the dealer and private parties
- Quick online approval with soft credit check
- Customize the loan to your needs
- Down payment is not required
- Flexible eligibility requirements
- Competitive interest rates
- Simplifies the car buying process
- Buy from private party or dealer
- Origination, inspection, notary, and registration fees may apply
- Only available in 33 states
- High minimum loan amount of $7,500
2) Auto Credit Express: Best for bad credit
With the tagline “Rebuilding America’s Credit,” Auto Credit Express helps people with troubled credit to get car loans through special finance lenders. The company’s dealer network includes more than 1,436 dealers nationwide.
Bad credit, no credit, and even bankruptcies can be okay, but borrowers will often need to show proof of a monthly income from $1,500 to $2,000, six months on a current qualifying job, a utility bill, several references, and more.
- Loan amounts $3,500 to $45,000
- Offers auto loans in all 50 states
- Terms up to 72 months
- No origination fee
- Minimum credit score requirement is 400
- Bad credit, no credit, bankruptcies okay
- Loan application approval or denial within 48 hours
- Does not report to credit bureaus
- Zero down payment possible
- Can help people with bad credit to get an auto loan
- Quick online loan request form
- Available nationwide
- No origination fees
- Good selection of loan amounts and terms
- Higher-than-average interest rates
- Will have to prove ability to pay
3) LightStream: Best for good credit
LightStream offers “loans for practically anything” and aims to uncomplicate lending while offering low rates and great service.
You can easily apply online and get an answer within a few minutes. If you like the offer, you can e-sign your loan agreement and set-up your loan to be funded as soon as the same day.
The lender offers both secured and unsecured auto loans which can both be used to buy a used car.
Todd Nelson, LightStream’s business development officer, says, when financing a car using LightStream’s unsecured auto loans, there are no restrictions on make, model, or mileage.
Further, you can purchase a vehicle from any seller, anywhere, and there are no fees. He says these loans are a great option for anyone who qualifies because they are competitive and the whole process can be completed online in a matter of hours.
A secured loan may be offered to those who don’t qualify for an unsecured one. It will require the car to be used as collateral for the loan so some lienholder paperwork will be required.
While the unsecured option may have its advantages, both can offer a great deal for those that qualify.
The company aims to reward applicants with good-to-excellent credit, which is defined by a good payment history, stable and sufficient income and assets, a proven ability to save, and several years of credit history with a variety of account types.
- $100 loan experience guarantee
- Best interest rate guarantee
- Loan amounts between $5,000 and $100,000
- Loan terms from 24 to 84 months
- Save 0.50 points on APR by setting up Autopay
- Fixed interest rates
- No fees
- Offers secured and unsecured auto loans
- A wide range of loan amounts and terms on offer
- Easy and quick online application
- Same-day funding
- No fees
- Unsecured and secured loans available
- Can get the loan on the same day
- Offers loan satisfaction guarantee and best rate guarantee
- Can be difficult to get approved
Honorable mentions for fair-to-good credit
The lenders mentioned above are solid choices, but there are others that are worth considering. For example, LendingPoint, Autopay, Prosper, and LendingClub all serve customers with fair-to-excellent credit, and any one of them may be able to offer you the best deal. We recommend you use SuperMoney’s auto loan offer engine, which allows you to compare loan offers from these and other lenders without hurting your credit.
4 frequently asked car loan questions
1) Which bank has the best auto loan rates?
It depends. If you are looking for the best-advertised auto loan rates, LightStream is known to offer some of the lowest on the market and will even beat any lender that offers a lower qualifying rate.
However, the best rates will only be available to those with excellent credit who fit the company’s ideal profile.
To find the best auto loan rate you can get, you need to shop around, get quotes, and compare offers.
2) What is a good APR for buying a used car?
The APR that a person gets depends on factors such as their credit score, the length of the loan, the price of the car, whether the interest rate is fixed or variable, the year of the vehicle, and more. Being so, a good APR is difficult to define.
However, to give you a ballpark idea, here are the average APRs in the U.S. on a 48-month fixed auto loan. Note, these figures were based on a used vehicle that is two years old and costs between $10,000 and $20,000.
The best way to find out what a good APR is for you and your situation is to get quotes from a few different lenders and compare them.
3) Can you finance a car that is 10 years old?
Possibly. Each lender has its own set of requirements, so you will need to check with the companies you are considering.
If your car doesn’t meet the requirements, you could also consider an unsecured personal loan (offered by lenders like Prosper, Peerform, LendingClub, and more), which will free you to choose any vehicle you want (limited only by your loan amount).
4) Where can I find the best auto loan rates for 72-month terms?
Find your best car loan rates today!
Now you know some of the best auto loan lenders for buying a used car in 2018. But what is the easiest way to find the best solution for you?
SuperMoney’s auto loan offer engine enables you to quickly and easily get competing offers from multiple lenders without hurting your credit score.
By doing so, you can cut down on research and application time by getting everything done within a few minutes, and all in one place.