Find out if you can reduce your monthly car payments in minutes
* checking your rate won’t affect your credit score
Check your rate
* checking your rate won’t affect your credit score
The average cost of an auto loan in the US is $568 per month for a 72-month loan. But your monthly payment could be lower than that national average—or higher—depending on a bunch of factors from your
credit scoreto your age and sex. Where you live and what kind of lender you borrow from also impact the terms of your loan or refinance options. On average, borrowers in
Oregonhave lower monthly auto payments than borrowers in
See the average rates in your state:
Why do APRs vary by state?
In general, your auto loan APR depends on factors that are personal to you, such as credit score, the age of your vehicle, and your overall income. However, every state sets an APR cap for loans—including auto loans. Depending on your state’s APR cap, you might see a higher or lower APR based on where you live.
Buying a car in your state
If you’re preparing to buy a car, follow these steps for a painless, affordable loan process.
1. Start by checking your credit. Under federal law, you can get a free annual credit report from AnnualCreditReport.com. Take the time to check that there are no errors in your credit report—if you find any, you should report them so that your score is accurate. Remember that lenders will be looking at a specialized version of your credit score that gives extra weight to your car payment history.
2. Compare offers from multiple lenders. Experts recommend comparing offers from at least three lenders before you sign a car loan agreement.
You can get an auto loan from a bank, a credit union, an online lender, or a dealership. Of these, a dealership is likely the most expensive version. Even though getting a loan from a dealership may be convenient—they’ll typically handle all of your paperwork!—the terms are usually more favorable to the dealer than to you.
Look for financing offers from your bank or consider joining a credit union. Credit unions often offer better interest rates because applicants are members.
3. Choose a loan term. Most car loans are for a 72-month or 84-month period, but it’s possible to get a shorter loan term if you can negotiate it. Remember that a shorter loan term often comes with a higher interest rate and higher monthly payments, but you may end up paying more interest overall with a longer term.
4. Get preapproved. Before you even head to the dealership, make sure you’re preapproved—or at least prequalified—for a loan. Preapproval allows you to pick out a car and negotiate the purchase with a clear idea of the budget you’re approved for.
5. Check your state’s car insurance requirements. Before you can finalize your auto loan—or your car purchase—you’ll need to show proof of insurance that meets your state’s legal requirements. Almost every state requires
liability insurance, but some also require drivers to carry
uninsured/underinsured motorist coverageor
personal injury protection (PIP).
The car-buying process also differs based on your location, especially if you’re buying the car from a private seller. Some states require more documentation, have a higher sales tax, or place extra regulations on the car-buying process. Check out Jerry's guides below:
Can you get a loan for a used car?
Yes, you can take out an auto loan for a used car—but you’ll probably have a higher interest rate. Some lenders also set minimum limits on the amount they’ll approve a loan for. If you need a loan for a car that’s worth less than $5,000, you may have trouble finding a loan.
Is an auto loan from a bank better than a loan from a dealership?
Banks and dealerships are two of the most common types of lenders. Approximately 54% of Americans get their auto loans from a bank—but is it really better to get a car loan from your
bankinstead of the dealership?
Pros and cons of an auto loan from a bank
Pro: You can prequalify—Getting a car loan from a bank allows you to prequalify before you shop for cars, which is a major advantage when you’re at the dealership. The average auto loan APR from a bank for buyers with good
creditis 3.64%, but you may be able to negotiate a lower rate if you’ve been a customer with the bank for a long time.
Con: It will likely be more expensive—You’ll pay a commission in exchange for that convenience. You’re essentially paying the dealer to act as a middleman, so your
APRis likely to be higher than if you went directly to the bank.
Some dealerships offer extra-low financing—sometimes as low as 0% APR. If you qualify for a low APR from your dealership, it may be a more affordable option than a bank loan.
Pros and cons of an auto loan from a dealership
Pro: Convenience—The major advantage of getting an auto loan through a dealership is convenience. You can get your
loanand your car in the same place, without going through a potentially lengthy process with a bank.
Con: It will likely be more expensive—You’ll pay a commission in exchange for that convenience. You’re essentially paying the dealer to act as a middleman, so your APR is likely to be higher than if you went directly to the bank.
Some dealerships offer extra-low
financing—sometimes as low as 0% APR. If you qualify for a low APR from your dealership, it may be a more affordable option than a bank loan.
Should you get a car loan or lease?
With APRs on the rise around the country, leasing is an increasingly popular alternative to a traditional auto loan. When you
lease a car, you essentially rent it long-term for a period of months or years (typically 24 to 48 months). This allows you to drive a high-quality vehicle during its best years without taking on the increasing costs of ownership that come with an older vehicle.
However, there are major drawbacks to leasing. For one, you won’t actually own your vehicle—which means that you’ll have limits on how you can use it. You won’t be able to make even minor modifications, and you’ll likely have strict limits on annual mileage, wear and tear, and more.
How to save money on auto loans and refinancing
Ready to find the right car loan for you? Download the
Jerryapp for help finding the lowest APR, best loan term, and most affordable refinancing out there.
When you enter your information, Jerry will search for competitive offers from the top lenders and show you your rates in the app. Once you’ve settled on the best loan for your budget, Jerry will handle the paperwork and help you get signed up for savings.
Oh, and did we mention that Jerry’s also the #1 rated insurance app? While Jerry’s working its magic on your auto loan, they can also shop for a cheaper rate on the car insurance you need—for an average annual savings of $600!
Still have some questions?
Let Jerry help you find the answers