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Auto Loans

New auto loans, used auto loans, and lease financing — ranked by APR by credit band, dealer-vs-direct routing, and pre-approval discipline.

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What to know before you compare

Auto loan rates are the single largest factor in the all-in cost of a vehicle — a 200-bps APR difference on a $40K, 60-month note is roughly $2,200 over the life of the loan. The 2026 market splits between dealer-arranged financing (convenient but typically marked up), direct bank lending (cheapest for prime credit), credit union loans (often the strongest for mid-band credit), and online direct lenders (fastest, broadest credit-box).

The buying guides below cover new auto, used auto, and refinance specifically. Pre-approval before walking onto a dealer lot is the discipline that captures most of the rate spread.

Frequently asked questions

What credit score do you need for an auto loan?+

Auto lenders finance a wide credit range, but the rate gap is large. Prime borrowers (roughly 660+ FICO) access the lowest advertised APRs; near-prime and subprime borrowers can still qualify but pay materially higher rates. Below the low 600s, expect fewer lenders and higher costs. Auto-specific scores (FICO Auto Score) and the loan-to-value ratio on the vehicle also factor into the decision.

Should you get pre-approved before going to the dealership?+

Pre-approval is generally the strongest discipline a car buyer has. It gives you a firm rate and amount to compare against the dealer's financing offer, turns you into a cash-equivalent buyer in negotiations, and helps you avoid dealer markup on the loan. You can still take dealer financing if it beats your pre-approval — but without one, you have no benchmark to negotiate against.

What is the difference between dealer financing and a direct auto loan?+

With dealer financing, the dealership arranges the loan through its lending partners, often adding a markup to the rate for arranging it. A direct auto loan comes straight from a bank, credit union, or online lender that you apply to yourself. Dealer financing is convenient and sometimes offers manufacturer-subsidized promotional rates, while direct loans frequently price lower for prime credit. Comparing both is the way to capture the better deal.

How long should an auto loan be?+

Shorter terms mean higher monthly payments but less total interest and faster equity. Longer terms (72-84 months) lower the payment but raise total interest and increase the risk of being underwater — owing more than the car is worth. A common guideline is to choose the shortest term whose payment you can comfortably afford, often 48-60 months, to balance affordability against total cost.

Can you get an auto loan with bad credit?+

Yes, financing is available across the credit spectrum, including subprime, though terms are less favorable. Expect higher APRs, larger down-payment requirements, and sometimes shorter terms. A larger down payment, a creditworthy co-signer, or a less expensive vehicle can improve approval odds and pricing. Borrowers who refinance after rebuilding credit often capture meaningful savings, so a higher-rate loan today need not be permanent.

Is it better to finance a new or used car?+

New-car loans typically carry lower advertised APRs and may qualify for manufacturer-subsidized financing, but new vehicles depreciate fastest in the first years. Used-car loans usually run slightly higher rates, yet the lower purchase price and slower depreciation can produce a lower overall cost of ownership. The right choice depends on the rate offered, the price difference, and how long you plan to keep the vehicle.

https://clearvaluelending.com/loans/auto

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