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Compare car loans for new cars

Find the right financing for your brand new set of wheels.

Updated

Fact checked

Editor's choice: Carvana

Carvana logo
  • Most credit types welcome
  • 45-day preapproval
  • Seven-day guarantee
Get your rate
Buying a brand new car is exciting. But deciding what you buy and how much you’re going to spend takes time. Budget out the cost and compare lenders to get the best deal.

How do new car loans work?

New car loans are typically secured term loans backed by your new vehicle. Generally, you can borrow between 80% and 100% of your vehicle’s value and cover the rest of the cost up front.

Once you get your funds either through a dealership or third-party lender, you pay it back plus interest and fees in monthly installments. Usually, it takes between two and five years to pay off a car loan. If you fall behind on your payments, your lender can repossess your vehicle.

Compare new car loans

Data indicated here is updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
Carvana
No minimum credit score
3.9% - 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
car.Loan.com Car Loans
300
Varies by network lender
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
SuperMoney Auto Purchase Loans Marketplace
600
Varies by lender
Varies by lender
Fair to excellent credit, an income source, US citizen or permanent resident, 18+ years old
Find an offer and get rates from competing lenders without affecting your credit score.
CarsDirect auto loans
Varies by network lender
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
Auto Credit Express Car Loans
300
Varies
Varies
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
Get connected with an auto lender near you, even if you have bad credit.
Monevo Auto Loans
500
3.99% to 35.99%
3 months to 12 years
Credit score of 500+, legal US resident and ages 18+.
Quickly compare multiple online lenders with competitive rates depending on your credit.
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
LendingTree
Good to excellent credit
Starting at 3.09%
Varies by lender
18+ years old, good to excellent credit, US citizen
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
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Compare up to 4 providers

What types of new car loans are available?

  • Secured car loan. Most car loans use the new car as collateral in case you default on payments. The interest rate is typically less than what comes with an unsecured loan because there’s less risk for the lender.
  • Unsecured car loan. An unsecured loan doesn’t hold the car as security. You typically need good or excellent credit to qualify for favorable unsecured rates.
  • Variable-rate car loan. With a variable-rate car loan, interest rates can increase or decrease according to the lending market. The variable rates can potentially be cheaper or more expensive than fixed rates.
  • Fixed-rate car loan. A fixed-rate car loan locks in an interest rate throughout the term of the loan — giving you certainty that payments won’t change.
  • Bad-credit car loan. If your credit history has suffered a few black marks and you need a new car, you can consider a bad-credit car loan. These loans often come with higher interest rates due to higher risk.

New car loans don’t have to be for brand-new cars — the majority of lenders accept a vehicle up to two years old from a dealer or private sale as well.

What’s a good interest rate on a new car loan?

Anything below 5% is considered a good interest rate on a new car loan. However, you won’t be able to qualify for a good rate on a car loan unless you have good to excellent credit.

How to find a competitive rate on a new car loan

Here are some factors to consider when comparing loans for a new car:

  • Interest rate and APR. These two rates pinpoint how competitive a loan is. An APR includes interest and all fees to let you know exactly how much you’ll have paid at the end of the loan term.
  • Other fees and charges. These extra costs could range from loan origination to early termination fees. The lender should be transparent about any fees before the agreement is finalized — always read the terms and conditions before signing.
  • Prepayment penalties. It varies by lender, but you may be able to repay your loan earlier without paying any fees. Be sure your loan doesn’t come with any fees for early repayment that could change the overall cost of the loan.
  • Eligibility. Before applying for a new car loan, make sure you’re eligible and that your car meets the lender’s criteria.
  • Loan amount. You should also check the minimum and maximum loan amounts to ensure the loan is right for your needs.

Other factors to consider

  • Down payment. Typically you’l have to make a down payment of 10% to 20% of the new car’s value. Doing so can help you save on interest.
  • Loan term. While it might be tempting to get a 72-month car loan, the longer your loan term, the more you’ll end up paying in interest.
  • Sales tax. Make sure your lender is including the sales tax when estimating the value of your car.

Calculate how much your car loan will cost

Pros and cons of a new car loan

Pros

  • Lets you purchase a new car without paying for it all at once
  • New cars are generally easier to finance
  • Can help build credit if the loan is maintained properly
  • Interest rates are generally lower on new car loans
  • Promotional 0% rates may apply if your credit score is high

Cons

  • New cars depreciate in value quickly
  • It’s another payment to manage in your monthly budget
  • If your loan isn’t large enough, you’ll need to front the rest of the cost

3 questions to ask before you get a new car loan

  • What’s the final cost? It’s essential that all the costs associated with the car loan are established with the loan provider. The obvious costs are the interest rates, but there are other costs too — these may vary depending on the lender.
  • What type of loan makes sense? Fixed interest rates are common with car loan companies and won’t change throughout the loan period. It’s more uncertain choosing a variable interest rate, as the loan provider could adjust the interest rate at any time depending on the market.
  • Can I pay the loan in full early? Early payment fees should be negotiated with the loan provider just in case your situation changes throughout the loan period.

Bottom line

New car loans typically come with lower rates than used car loans since a newer vehicle will be worth more to a lender should you default. You typically have a larger selection of lenders to choose from as well.

You can learn more about how auto financing works with our guide to car loans. Or explore tips for buying a new car if you’re ready to hit the dealership.

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