Good Credit Auto Loans: Lowest Rates and Top Lenders (2024) (2024)

Lenders place ranges of credit scores in different credit categories, often called credit bands. You may have heard of terms like “poor” or “excellent” — or even “prime” or “subprime” — used to describe credit categories. While “good credit” can refer to a healthy credit score in general, it also refers to a specific range of credit scores.

There are two credit rating systems: FICO and VantageScore. Their credit ranges differ slightly, but most lenders consider a borrower’s FICO score.

FICO breaks its credit categories down as follows:

• Exceptional: 800-850
• Very good: 740-799
• Good: 670-739
• Fair: 580-669
• Poor: 300-579

Your credit score is one of the main factors used to determine your interest rate. Typically, the lower your credit score, the higher your interest rate. Good credit auto loans come with some of the lowest rates available because a good credit score indicates a low risk of missing car payments or defaulting on a loan.

What Is the Average Rate for Good Credit Auto Loans?

According to data from the Q4 2021 Experian State of the Automotive Finance Market report, the average interest rate for good credit auto loans is around 3.5% for new car purchases and 5.4% for used vehicle purchases. The table below shows the average car loan rates by credit score.

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Annual Percentage Rate vs. Interest Rate

You may have seen the terms annual percentage rate (APR) and interest rate used in similar ways. While they are related, they differ slightly. Your interest rate is the rate the lender charges you to borrow the money. The APR also includes other costs and fees that come with a loan.

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*Rates as of 9/15/22. These rates may include an autopay discount.

Ratings shown are based on our overall study but may not reflect a provider’s rating for good credit auto loans. For this guide, we ranked providers based on their favorability for borrowers with good credit.

Starting APR: 6.99%
Loan amounts: $8,000 to $100,000 ($5,000 minimum for refinance)
Loan terms: 12 to 84 months
Availability: 48 states (not available in Alaska or Hawaii)
Minimum credit score: 575

Rather than a direct lender, myAutoloan is a car loan marketplace. To use it, you enter your information into the website and wait for online lenders to contact you. This lets you conveniently compare offers from multiple lenders without filling out multiple loan applications.

Borrowers with good credit have access to rates as low as 6.99% for new car loans. The $8,000 minimum purchase loan and $5,000 minimum for refinancing are on the high side for the industry. While these amounts are suitable for a wide range of vehicles, they rule out people looking for an inexpensive used auto and those who want to put down a large percentage of the purchase price.

Keep reading: myAutoloan review

Starting APR: 5.99%
Loan amounts: No min/max
Loan terms: Up to 84 months
Availability: All 50 states
Minimum credit score: 640

If you have good credit and want a loan with lots of flexibility, Consumers Credit Union is one of the best options available. Starting APRs are as low as 5.99%, ranking among some of the lowest rates in the auto loan industry. There are no minimum or maximum loan amounts and loan terms range from anywhere up to 84 months, making this company the most flexible option for auto loans.

Consumers Credit Union is available in all 50 states and has both online banking and in-person locations, making this one of the more readily-available auto loan companies in the nation. There is no application fee, but you must be a member of the credit union to apply. To complete the online application process, simply pay the one-time $5.00 membership fee and fill out a short form.

Keep reading: Consumers Credit Union review

Starting APR: 5.69%
Loan amounts: $2,500-$100,000
Loan terms: 24 to 84 months
Availability: All 50 states
Minimum credit score: 575

AutoPay offers a wide range of auto loan amounts. With starting APRs of 5.69%, the company offers low rates even for those who might not be in the best position to receive auto loans from other top companies in the industry.

The company holds a good reputation with customers, boasting an A+ rating from the Better Business Bureau (BBB) as well as a 4.58 customer rating. AutoPay will make sure customers get affordable auto loans despite their credit score, while also maintaining a strong relationship with them in the process. This is a good option for those looking for cheaper access to auto loans and a company that will give its customers peace of mind.

Starting APR: 4.74%
Loan amounts: $500 to $150,000
Loan terms: 36 to 84 months
Availability: 50 states
Minimum credit score: 610

If you have good credit and are looking for low rates, it’s worth considering Pentagon Federal Credit Union — otherwise known as PenFed. The organization often offers some of the lowest APRs, with current rates starting at 4.74% for good credit auto loans for new vehicles. PenFed’s $500 minimum loan amount also offers a little more flexibility than some auto lenders.

However, since PenFed is a credit union and not a commercial bank, you’ll need to be a member to access its auto loans. The credit union was originally open only to federal employees and members of the military, but now you simply need to make a donation to one of several charitable organizations to become a member.

Starting APR: Varies
Loan amounts: Varies
Loan terms: Varies
Availability: All 50 states
Minimum credit score: 560

iLending is another well-rounded company that offers low starting APRs and also gives an opportunity for those with lower credit scores to get an auto loan. The company is available in all 50 states and also has in-person locations around the country, making access to securing an auto loan easier than ever.

One thing to keep in mind, however, is that the cost of a loan and how long that loan term is can vary depending on a number of factors, including credit score, income, and debt. While iLending has a lot to offer, that does not mean that every customer will have low rates on their auto loans. Yet overall, iLending can provide customers with affordable auto loan rates that they may not have access to elsewhere.

If you want to qualify for a good credit auto loan, you’ll need to have a credit score of at least 661. You’ll also need to have a reliable source of income, like regular employment or income from social security. While other factors affect your interest rate, you’ll need at least the minimum score to access rates for good credit at a bank, credit union, dealership or other financial institution.

Factors Affecting Your Credit Score

Your credit score is determined by several factors related to your financial history and current account status, including:

• Payment history: Missing a payment can lower your credit score. The penalties increase if you miss multiple consecutive payments.
• Account utilization: Your utilization rate is the amount of available credit you’re currently using. Using too high a percentage of your credit can cause your score to drop.
• Credit mix: Having a diverse mix of credit accounts, like credit cards, mortgages, student loans and personal loans can improve your credit score.
• Account history: Your credit score takes into account the age of your oldest credit account, the age of your newest credit account and the average age of all your accounts. Generally, the older your accounts, the better your credit score.
• Credit inquiries: Hard credit checks, like the ones used when you apply for auto loans, will temporarily lower your credit score. However, applying for several of the same types of loans in a short period of time has the same impact on your credit score as applying for just one, so it makes sense to shop around.

How To Improve Your Credit Score

If your credit score is a 660 or lower, you won’t be able to get a good credit auto loan. But that doesn’t mean you can’t get one in the future. There are no overnight fixes for your credit score — improving poor credit can take a long time. But as you can see from the table above, it’s worth it for the difference in interest rates.

Here are a few things you can do that may improve your credit score:

• Pay off debt: If you have the ability to pay off any revolving debt — especially high-interest debt — pay what you can. First, however, make sure you won’t encounter any early payment or prepayment penalties. Lowering the amount of available credit you’re using is one of the faster ways to boost your credit score.
• Ask for a credit limit increase: The other side of the credit utilization ratio is the amount of credit you have available to you. If you think you’re in a good position to increase your credit limits without spending more, you can decrease the percentage of your credit that you’re using.
• Keep making payments: At the very least, continue making your minimum monthly payments on time. Your payment history is one of the single most important factors in your credit history. A history of regular loan payments on your credit report will eventually bring your score up.

Other Ways To Lower Your Interest Rate

Improving bad credit isn’t the only way to get lower interest rates. There are a few other things you can do to help get more competitive rates on a car loan:

• Get a shorter term: Longer car loan terms, like 84 months, generally come with higher interest rates. If you can afford higher monthly payments, consider a shorter loan term.
• Get a discount: There aren’t a huge number of rate discounts when it comes to auto loans, but there are some. Many lenders offer a discount for signing up for automatic payments, usually around 0.5%.
• Make a larger down payment: One factor in your interest rate is the loan-to-value (LTV) ratio. This is how much you are borrowing compared to the value of the vehicle. Making a bigger down payment will lower your LTV ratio and could lower your interest rate too.
• Bargain down the sales price: You can also lower the LTV ratio by reducing the purchase price of the vehicle. Car dealers typically have some wiggle room on prices, so you may be able to negotiate a lower sales price.
• Get a co-signer: If you have a family member or friend who would qualify for a good credit auto loan, you can see if they are willing to co-sign an auto loan with you. When you have a co-signer, you “piggyback” on their credit, which may help you find better rates. This is a sensitive situation, so be cautious who you ask.

People with credit scores of 661 or above have access to good credit auto loans and the low rates that come with them. Borrowers with high credit scores generally have plenty of loan options to choose from.

If your credit score is lower, you can work to improve it. But in the meantime, there are other ways to try to lower your auto loan interest rates.

No matter your credit score, it’s important to shop around. You’ll most likely get different rates from each lender. Getting loan offers online is a quick and easy way to compare lenders and see which offers the best car loan deal for you.

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies. We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.

Here are the factors our ratings take into account:

• Reputation (25% of total score): Our research team considered ratings from industry experts and each lender’s years in business when giving this score.
• Rates (25% of total score): Auto loan providers with low APRs and high loan amounts scored highest in this category.
• Availability (25% of total score): Companies that cover a variety of circ*mstances are more likely to meet consumer needs.
• Customer Experience (25% of total score): This score is based on customer satisfaction ratings and transparency. We also considered the responsiveness and helpfulness of each lender’s customer service team.

*Data accurate at time of publication.

**Your loan terms, including APR, may differ based on loan purpose, amount, term length and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

***Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of 3 years would result in 36 monthly payments of $303.99.