If you’re looking for the best loan to buy a car, you’re already ahead of the game. Taking the time to research your financing options can save you thousands over the life of your auto loan.
With interest rates still fluctuating in 2025, finding the right lender – and the right strategy – can make a huge difference in what you pay each month.
In this guide from Available Cards, we’ll break down everything you need to know to land a car loan that truly works in your favor.
Why Choosing the Right Auto Loan Matters
Buying a car is a big financial step, and the loan you choose affects far more than your monthly payment. It influences how much you’ll pay overall, how long you’ll be in debt, and how flexible your budget can be in the years to come.
Let’s say you’re financing $25,000 over five years. With a 6% interest rate, you’ll pay about $4,000 in interest. But if your rate is 9%, that cost jumps to nearly $6,000. That’s two grand you could’ve spent on insurance, maintenance – or a few weekend getaways.
That’s why finding the best loan to buy a car is about more than just getting approved. It’s about keeping control over your money from day one.
What Affects the Loan Rate You’ll Get
The rate you’re offered doesn’t come out of nowhere. Lenders look at several key factors to determine how risky – or reliable – you are as a borrower.
Your credit score is the biggest piece of the puzzle. The higher it is, the better your rate will be. Most lenders reserve their best auto loan rates for borrowers with scores above 700.
Your down payment also plays a role. The more you put down, the less the lender has to finance. This lowers their risk and often earns you a lower APR.
Loan term is another big one. Shorter terms typically have better rates, though the monthly payments will be higher. Spreading your loan over 72 or 84 months may seem appealing, but it usually means paying more in the long run.
The type of car matters too. New cars usually qualify for better rates than used ones, because they’re easier to value and less likely to have mechanical issues.
And finally, your lender plays a major part. Banks, credit unions, online lenders, and dealerships all offer auto loans, but their rates and fees vary wildly. Comparing them is the only way to find your best match.
Best Places to Find the Best Loan to Buy a Car in 2025
Let’s look at some of the top options for getting a competitive car loan this year:
Bank of America
With rates starting around 5.34% APR, Bank of America is a solid option – especially if you’re an existing customer. They offer financing for new and used cars, along with refinancing and lease buyouts. Preapproval is quick and can help you walk into the dealership with confidence.
Consumers Credit Union
If you’re open to joining a credit union, Consumers Credit Union offers rates as low as 3.99% for qualified borrowers. Their membership is open to anyone, and the process is refreshingly straightforward. They’re especially competitive for used car financing.
PenFed Credit Union
PenFed is another credit union with strong offers in 2025. They have rates starting at 4.74% for new cars and 6.04% for used ones. While you’ll need to join PenFed to apply, the benefits – like low fees and good customer service – can be well worth it.
Autopay
Autopay isn’t a lender – it’s a loan marketplace that connects you to multiple financing offers. With APRs starting at 2.99%, it’s one of the best ways to see what’s out there without making a dozen phone calls. It’s a smart move if you want to compare rates quickly and easily.
How to Prepare for Your Auto Loan Application
Before you even fill out an application, there are a few things you can do to boost your odds of approval – and get better terms.
Start by checking your credit report for errors. One incorrect late payment or outdated balance can drag down your score. Dispute any inaccuracies before applying.
If possible, pay down existing debts. This improves your debt-to-income ratio, which lenders use to assess your repayment ability.
Gather important documents ahead of time, like your driver’s license, Social Security number, proof of income (pay stubs or tax returns), and information about the car you want to buy.
And don’t forget to get preapproved before heading to the dealership. This gives you a clearer idea of your budget and puts you in a stronger position to negotiate the price.
Tips to Get Approved for the Best Loan to Buy a Car
You don’t have to be a financial genius to score a great deal. These simple tips can go a long way:
- Compare offers from different lenders – including credit unions, online platforms, and traditional banks.
- Aim for a larger down payment, even if it means waiting a few extra months. It reduces your loan amount and increases your approval odds.
- Avoid dealership financing unless they’re offering a special promotional rate. Dealers often mark up rates to earn extra profit.
- Use tools like Available Cards to compare real offers based on your credit profile and loan needs.
- Consider refinancing later if your credit improves or market rates drop. You’re not locked into your loan forever.
By taking a proactive approach, you’ll be more likely to secure a loan that keeps your monthly payments manageable and your total costs low.
FAQs – Frequently Asked Questions
What credit score do I need to get the best loan to buy a car?
Most lenders reserve their best rates for credit scores of 720 or higher, but some offer competitive rates starting at 680.
Should I finance through a dealership or my bank?
Banks and credit unions often have better rates than dealerships. Always compare before deciding.
Is it better to get preapproved before going to the dealership?
Yes! Preapproval gives you a budget and bargaining power, and helps you avoid last-minute surprises.
Can I refinance my auto loan later?
Absolutely. If your credit improves or rates go down, refinancing can help lower your payments or reduce your total interest.
How long should my loan term be?
Shorter terms (36–48 months) usually come with better rates and lower total costs. Longer terms can stretch your payments but increase your interest.
Is a used car loan more expensive than a new one?
Usually, yes. Lenders often charge higher APRs on used cars because of the perceived risk and depreciation.
Final Thoughts on Getting the Best Loan to Buy a Car
Securing the best loan to buy a car in 2025 takes more than just filling out a form – it takes strategy, preparation, and a little patience.
But the payoff is worth it. A lower rate doesn’t just mean smaller monthly payments – it means freedom, flexibility, and more money in your pocket for the things you actually enjoy.
At Available Cards, we’re here to guide you every step of the way. From credit-building tips to lender comparisons, we make it easier to borrow smart. So take your time, do your homework, and get ready to hit the road with confidence.