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Bank Of America

Bank of America: 2023 Auto Loan Review Published 2022-05-24 07:45:00

Written by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the details of taking out loans to purchase an automobile.

Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial choices by providing you with interactive tools and financial calculators, publishing original and objective content. We also allow users to conduct research and compare information for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The products that appear on this website are provided by companies who pay us. This compensation may impact how and where products appear on the site, such as, for example, the sequence in which they be listed within the categories of listing and other categories, unless prohibited by law. Our loans, mortgages, and other home lending products. But this compensation does affect the information we publish, or the reviews that you see on this site. We do not contain the entire universe of businesses or financial offers that may be open to you.

Reviewer's disclosure: All reviews are prepared by staff. The opinions expressed in them are only those of the reviewer and have not been evaluated or accepted by any advertiser. The information that is included, including rates and fees provided in the review are accurate up to the date that the review was written. Review the data in the upper right hand corner of the page, and the lender's site for the most up-to-date details.

At a first glance 3.5 Rating: 3.5 stars out of five

Bankrate Score

Availability Rating: 3.7 stars out of 5

The Affordability Score: 3.2 stars out of five

The Customer Service Rating is 4.6 5 stars from 5

A rating of Transparency: 2.5 stars out of 5

Check auto loan rates

About the Bank of America. Loan amount $7,500.+

Min. credit score Not specified

APR starting at 5.79%

Funds are available as soon as possible.

Pros and pros and Bank of America auto loans Bank of America offers the security of a nationally recognized bank, but you must consider all sides before deciding to take out a loan.

PROS Long shopping window

All 50 states are covered.

ConS Maximum loan amount loan amount

Discounts for members only

No prequalification

Bank of America works directly with authorized dealers across the nation to provide financing for over two million vehicles. A large network isn't the only advantage it has and those who qualify preferred rewards members are eligible for an interest rate reduction. Applications can be made online or at any of its over 4,000 brick-and-mortar locations. The process is also quick with the majority of applicants receiving an approval decision within 60 minutes. After the decision is made your rate is set for 30 days after the approval, giving you time to shop around before signing a loan contract.

Pros and cons of Bank of America auto loans Here are a few benefits and drawbacks associated with Bank of America auto loans. Pros: Long shopping window. Bank of America locks in your rate and permits customers to shop for 30 days following qualifying. Available in all 50 states. Auto financing is available for drivers across all 50 states as well as the District of Columbia. Cons: Expensive limit on loan amount. $7,500 is on the high level compared to other lender alternatives. Discount only for members. Rate discounts are only available for preferred members with at least $20,000 in a deposit or investment account. No prequalification is required. You'll have to take the two-point penalty on your credit score if want to know potential rates. Who are Bank of America best for? An auto loan through Bank of America is best for those who plan to finance their vehicle via dealerships rather than online. Although the rates offered are competitive, in order to benefit , you must be a preferred rewards memberwhich means you must hold a high amount of money in a deposit or an investment. If you're looking to stay clear of the dealership but don't have $20,000 to keep in the bank to receive the rate discount You may be able to find better rates elsewhere. Different types of auto loans available Bank of America offers loans for used and new vehicle purchases along with refinancing loans. New and used car loans The financing for a new or used car loan through Bank of America has a minimum loan requirement of $7,500 ($8,000 for Minnesota) and can be conducted either online or in person. Loan decisions can be completed within minutes of submitting the application, if no additional details are needed. Refinance A refinance loan from Bank of America must be at least $7500. The application can be done either online, on the phone or in an Bank of America branch office. It's a fantastic option for drivers who previously hold the loan with Bank of America, or any other lender, and for those who can get member rates discounts.

Rates and terms of interest The lowest rates are provided by Bank of America preferred rewards members with excellent credit. Loan product

Interest rate

New car purchase

Starting with 5.79% APR

Used car purchase

Starting at 5.99% APR

Refinance

Starting from 6.79% APR

The online loan application allows you to select terms that are either 48 60 or 72 months. How do you apply for an auto loan with Bank of America There is no application fee when applying to get an auto loan with Bank of America, and you can complete the application online, over the phone or in person at any of its branches.

The process is straightforward and requires only a few steps to complete. It is not necessary to have your car selected before you submit your application.

Provide details about yourself as well as the loan. The first step for financing your vehicle with Bank of America is to submit an online application with your loan amount and the term you'd like to take, as well as your personal and income details and whether you're submitting the co-applicant. Lock your rate. Bank of America has a 30-day rate lock which lets you look around and get an idea of the amount you can afford. Complete the deal. When you locate a car that is registered with an authorized dealer and you have the option to finalize the loan and walk away with the keys in your hand and without the hassle of waiting at a finance counter all day. The information you need to give includes:

The amount of the loan and the term. Contact details, including address. Social Security number and birth date. Employment information and income. U.S. citizenship status. Joint applicant information, if applicable.

The auto loan requirements You must be an U.S citizens or permanent residents and be at minimum 18 years of age in order to finance a vehicle through Bank of America. Additionally there are certain conditions for the car itself. According to Bank of America's FAQ page, the following vehicles are not eligible for credit: Vehicles older that 10 years of age. Vehicles with 125,000 miles or more. Vehicles worth under $6,000. vehicles that are used for business or commercial purposes. Salvage or branded-title vehicles. Lemon law or gray market vehicles. Support for the customer If you like to communicate in person and interaction, the loan with Bank of America can serve you very well. Customer questions can also be answered on its website using live chat or by phone. Once you have received loan approval, you'll be matched with an loan specialist who will assist you with you with your questions. Wells Fargo customer assistance can be reached via telephone Monday to Friday from 8 a.m. to midnight ET, and on Saturdays between 8 a.m. until 8 p.m. ET. What Bankrate rates Bank of America Overall score

3.5

The availability

3.7

Bank of America offers a range of auto loans that have a high minimum amount.

Affordability

3.2

The rates that Bank of America offers are middling, but it does not charge an application or origination fee.

Customer experience

4.6

Bank of America has an user-friendly website and mobile app, as well as a 30-day interest lock feature.

Customer service support is not available seven days seven days a week.

Transparency

2.5

Bank of America does not offer prequalification but does disclose the fees and starting rates.

Editorial disclosure The reviews are written by Bankrate.com staff. The opinions expressed in the review are only the opinions of the reviewer and have not been reviewed nor approved by any advertiser. The information that is included, including rates and fees provided in the review are accurate as of the date when the review first appeared. Review the information on the right, and the lender's website to find the most recent details.

Written by

Rebecca Betterton

Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers with the ins and outs of securely taking out loans to purchase an automobile.

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How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and, services, or by you clicking on specific links on our site. This compensation could impact how, where and when products appear within listing categories in the event that they are not permitted by law. This is the case for our mortgage, home equity and other home loan products. Other factors, like our own website rules and whether a product is available within the area you reside in or is within your own personal credit score could also affect the way and place products are listed on this site. While we strive to provide the most diverse selection of products, Bankrate does not include details about every credit or financial product or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |

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Can refinancing a car loan affect your credit score? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by providing you with interactive tools and financial calculators as well as publishing original and objective content. We also allow users to conduct research and compare data for free - so that you can make sound financial decisions. Bankrate has agreements with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that pay us. This compensation may impact how and where products appear on this site, including the sequence in which they appear within the listing categories in the event that they are not permitted by law for our mortgage, home equity, and other products for home loans. But this compensation does affect the information we provide, or the reviews appear on this website. We do not contain the entire universe of businesses or financial deals that could be available to you.

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Hinterhaus Productions/Getty Images

5 minutes read. Published January 12, 2023

Authored by Mia Taylor Written by Contributing Writer

Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com.

Editor: Helen Wilbers Edited by

Helen Wilbers has been editing for Bankrate since the end of 2022. He values the clarity of his reporting, which helps readers confidently find deals and make the best decisions for their financials. He is a specialist in auto and small business loans.

The promise of the Bankrate promise

More info

At Bankrate we aim to help you make smarter financial decisions. We adhere to the highest standards of ethical standards ,

This post could contain some references to products offered by our partners. Here's an explanation for how we earn money .

The Bankrate promise

Founded in 1976, Bankrate has a long record of helping people make informed financial decisions.

We've maintained this reputation for over four decades by demystifying the financial decision-making

process, and giving people confidence in which actions to follow next. process and gives people confidence in the next step.

so you can trust you can trust us to put your needs first. All of our content was created by and edited by

We make sure that everything we publish is objective, accurate and trustworthy. Our loans editors and reporters focus on the points consumers care about the most -- the various kinds of lending options and the most competitive rates, the best lenders, ways to pay off debt and more -- so you'll be able to feel secure when investing your money.

Editorial integrity

Bankrate follows a strict and rigorous policy, so you can rest assured that we're putting your interests first. Our award-winning editors, reporters and editors produce honest and reliable information to help you make the right financial choices. Our main principles are that we appreciate your trust. Our mission is to offer readers truthful and impartial information, and we have standards for editorial content in place to ensure that is the case. Our editors and reporters rigorously verify the truthfulness of content in order to make sure that the information you're reading is correct. We keep a barrier with our advertising partners and the editorial team. Our editorial team doesn't receive any direct payment through our sponsors. Editorial Independence Bankrate's editorial team writes on behalf of YOU the reader. Our aim is to provide you the best information to assist you in making intelligent financial decisions for your personal finances. We adhere to strict guidelines in order in order to make sure that the content we publish isn't affected by advertisements. Our editorial team receives no any compensation directly from advertisers and our content is fact-checked to ensure accuracy. If you're reading an article or a review, you'll be able to trust that you're receiving trustworthy and reliable information.

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You have money questions. Bankrate can help. Our experts have helped you understand your money for over four years. We are constantly striving to provide consumers with the expert advice and tools required to succeed throughout life's financial journey. Bankrate follows a strict , which means you can be sure that our content is truthful and precise. Our award-winning editors and reporters provide honest and trustworthy information to assist you in making the best financial decisions. The content we create by our editorial staff is objective, factual and uninfluenced through our sponsors. We're honest about the ways we're capable of bringing high-quality content, competitive rates, and practical tools for you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and, services, or when you click on certain links posted on our site. So, this compensation can influence the manner, place and in what order products appear in listing categories, except where prohibited by law. We also offer loan products, such as mortgages and home equity, and other home loan products. Other elements, like our own rules for our website and whether a product is available within the area you reside in or is within your self-selected credit score range could also affect the way and place products are listed on this site. We strive to provide the most diverse selection of products, Bankrate does not include information about each financial or credit item or service.

Refinancing the car loan could get you more favorable loan terms and free up funds in your budget. But what happens to the credit rating of yours? You'll likely see a small reduction of your credit rating. However, don't be afraid to stay away from just because of a temporarily lower score. The decision could turn out to be good choice that will result in cost savings or a much-needed financial relief. Refinancing an auto loan impacts credit Refinancing a car loan could impact your credit score. This is because of your FICO credit score, which is a provided by Fair Isaac Corporation. Fair Isaac Corporation. FICO scores are calculated based on how the credit you have managed, such as your payment history, how much you owe in debt, the duration of credit histories and even recent credit applications like refinancing your auto loan. The credit scoring model can reduce your score by a couple of points when you apply for credit, and a request for hard inquiry is made on your credit report. Additionally, having a new account on your credit profile decreases the age average of credit accounts, and this can impact your overall FICO score. Here's a more detailed analysis of how refinancing a car loan impacts your credit: It can trigger hard inquiries. Every time you make an application for an loan there is an inquiry on your credit report is generated, which could result in the slightest decrease in your credit score. Hard inquiries stay on your credit report for as long as two years but only impact your score for up to 12 months. Consequently, -- which is the process of applying for a new loan can temporarily ding your credit score. The loan will lower your account's average age. Also, refinancing reduces the average age of your accounts, which can lead to an eventual decrease in your credit score. It's good to know that account age only counts for 15 percent of the credit score. Your score should bounce back quickly if you manage your finances properly the newly acquired auto loan and other debt accounts. It has more impact if you report it as a brand new loan When a loan refinance is reported as a "new" loan, it will more significantly impact your credit score. The refinance won't just generate a credit inquiry but also have the added effect of creating an additional "open date" in your profile. If a new open date is found, it tells the credit bureaus that you've agreed to a new obligation, increasing your overall debt load. How long will the credit rating of my client be affected when I refinance? Although refinancing a car loan affects your credit score, the effects are not permanent. Within a few months of payments that aren't interrupted your credit score should return to where it was prior to the time you refinanced. In some instances the score may rise by a small amount. If you have any hard questions regarding refinancing, the score impact is likely to diminish in a matter of one year. How to limit harm to your credit score Even though your credit score may decline when you refinance however, there are several ways to increase your credit score: Apply for prequalification. Shop around to find the most affordable refinancing deal. When you've got a list of your preferred lenders, you can to look at financing options without impacting the credit rating. Apply within a specified time. If you make loan applications within the 14-day period, the majority of credit scoring models will group the applications into one inquiry. This is referred to as rate shopping. It can also reduce the effect on your credit score. You must make timely auto loan payment. The most significant component of your credit score is your payment history. It accounts for 35 percent, so paying your loan on time each month can help your credit score bounce back. Be patient when opening new credit accounts. Your credit age will decrease as you refinance. Holding off on the opening of new accounts for credit following refinancing can help increase this number and may increase your credit score over time. How refinancing a car loan works When you are ready to refinance your auto loan Follow these steps to make the process smooth: Check your credit report. Review your credit report to ensure it's free of errors, and file disputes to resolve any issues you find. Doing this can aid . A better score -- 670 or above -- increases your chances of getting an additional loan with attractive conditions. Find the most attractive loan deals. There is no shortage of loans, which is why you need to shop around for the best deal. Read lender reviews and apply to see loan offers that you could be eligible for. Complete an official application. Many credit unions, banks and online lenders offer simple online applications. You can also go to the branch or phone to apply. It is possible to receive a loan decision right away, however, the lender may take some time to complete all the paperwork for closing. Seal the deal. Review your loan documents and address any concerns or questions regarding the lender. When you've signed the loan documents, the new lender will issue you with a check to pay off the current loan or manage the transaction on its own. When to refinance your car loan There are many reasons to refinance your car loan could make sense. But, it is important to take the next step . Refinancing is worth considering in the event that auto loan rates have dropped since you have taken out the car loan or you've seen your credit rating improve and you're now eligible for a better rate. It is also a good option for those who are going through a rough financial patch and need lower auto payments to free up funds. If you're paying the same rate of interest, you might be able to extend the loan term, which lowers your monthly payment. It is possible to look into a more than refinancing, which entails adjusting the monthly payment amount and due date, or the interest rate on your existing loan. You should also refinance if you need to increase or add to the loan. Is it a good idea to refinance a car loan? But there are also some scenarios in which refinancing is not a good option. Vehicles that are old or with high mileage: If you're driving an older vehicle or with high mileage, it may be best not to refinance it. It's not worth incurring the fees associated with refinancing if you'll need to replace your vehicle in the near future. The cost of refinancing is greater than the benefits If you've paid off most of the initial loan value, fees associated with refinancing may exceed the benefits. Are you planning to apply for credit soon If you're applying for more credit or loans in the near future, you might consider rethinking refinancing. Refinancing your vehicle loan could trigger a hard credit inquiry , and reduce the average age of your accounts, which will temporarily lower your score on credit. You can't find a favorable rate If the rates that you're given don't match the current rate of interest There's no reason to refinance. The bottom line There are the consequences of a car loan. It can temporarily hurt the credit rating of yours. However, the financial benefits can far outweigh a decline in credit score. There are other ways to reduce the negative impact of your score and assist it rebound when you apply for refinancing. Before you decide if refinancing is a good idea, sense, familiarize yourself with the procedure to avoid surprises. Additionally, research the lenders, apply for prequalification and run the numbers for a more informed decision.

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Written by Contributing Writer

Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com.

Editor: Helen Wilbers Edited by

Helen Wilbers has been editing for Bankrate from late 2022. He values clear reporting that helps readers confidently get deals and make most informed decisions regarding their finances. He specializes in small and auto loans.

Other Articles Related to Auto Loans 4 min read Mar 02, 2023

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How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods or services, or by you clicking on certain links posted on our website. So, this compensation can affect the way, location and in what order products appear within listing categories, unless it is prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether the product is offered in your region or within your personal credit score could also affect the way and place products are listed on this website. Although we try to offer a wide range offers, Bankrate does not include specific information on every credit or financial product or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |

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Is a long-term auto loan is a good idea? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by offering financial calculators and interactive tools that provide objective and original content. We also allow users to conduct research and compare data at no cost and help you make sound financial decisions. Bankrate has partnerships with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies who pay us. This compensation may impact how and where products are displayed on this website, for example such things as the order in which they be listed within the categories of listing, except where prohibited by law. Our loan products, such as mortgages and home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews appear on this website. We do not contain the universe of companies or financial deals that may be accessible to you.

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4 min read Read Published on January 30, 2023.

Writen by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ways and pitfalls of borrowing money to purchase a car.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to control their finances with clear, well-researched information that breaks down otherwise complicated topics into bite-sized pieces.

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At Bankrate we strive to help you make smarter financial decisions. We adhere to the highest standards of ethical standards ,

This article may include some references to products offered by our partners. Here's an explanation for how we earn money .

The promise of the Bankrate promise

In 1976, Bankrate was founded. Bankrate has a long record of helping people make smart financial choices.

We've maintained this reputation for more than 40 years by simplifying the process of financial decision-making

process and giving people confidence in the decisions they will do next. Bankrate has a very strict ,

so you can trust that we'll put your interests first. All of our content was written by and edited by ,

who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the areas that consumers are concerned about the most -- the various types of loans available as well as the most favorable rates, the most reliable lenders, ways to pay off debt and many more. So you can feel confident when making your investment.

Editorial integrity

Bankrate has a strict policy standard of conduct, which means you can be confident that we put your interests first. Our award-winning editors and reporters create honest and accurate information to assist you in making the right financial choices. The key principles We respect your confidence. Our aim is to offer readers truthful and impartial information. We have standards for editorial content in place to ensure this happens. Our editors and reporters rigorously verify the truthfulness of content in order to make sure the information you're receiving is true. We have a strict separation between advertisers as well as our editorial staff. Our editorial team does not receive any direct payment by our advertising partners. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our goal is to provide you the most accurate advice to aid you in making informed financial choices for your own personal finances. We follow rigorous guidelines that ensure our content isn't in any way influenced by advertising. Our editorial staff receives no any compensation directly from advertisers and all of our content is fact-checked to ensure accuracy. Therefore, whether you're reading an article or review, you'll be able to trust that you're getting reliable and reliable information.

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If you have questions about money. Bankrate has the answers. Our experts have been helping you manage your money for more than four years. We continually strive to provide our readers with the professional guidance and the tools necessary to make it through life's financial journey. Bankrate adheres to strict standards , so you can trust that our information is trustworthy and reliable. Our award-winning editors and reporters provide honest and trustworthy content to help you make the best financial decisions. Our content produced by our editorial staff is objective, truthful, and not influenced by our advertisers. We're honest about the ways we're in a position to provide quality information, competitive rates and helpful tools to you , by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and services or through you clicking specific links on our site. This compensation could impact how, where and in what order items are listed, except where prohibited by law. We also offer mortgage home equity, mortgage and other products for home loans. Other elements, like our own website rules and whether the product is available in the area you reside in or is within your own personal credit score could also affect how and where products appear on this website. Although we try to offer the most diverse selection of products, Bankrate does not include information about each financial or credit item or service.

The process of buying a car is much more than choosing whether to get an SUV or sedan in black or red. If you're buying the car with a loan it is also necessary decide on which repayment terms will make the most suitable for your budget and financial objectives. Car prices are still steep in comparison to the time before there was the pandemic COVID-19. The average cost of a brand new car in December 2022 was greater than $49,500 - five percent more than the same month a year prior and over 20 percent higher than in December 2020 . The longer the loan term -- typically ranges from 24 to or two to seven years -- the cheaper your monthly payment will be. But be aware that the lower your monthly payments have drawbacks, including potentially costing you more over the long run. For most drivers who are looking to purchase a car for a long time, a lengthy loan is not a great choice. Reasons to avoid the long-term car loan The longer-term loans are appealing because the monthly payments will be less than those for the shorter-term loan. Although they permit you to buy a larger car , but still make the payments affordable, long-term car loans could put you in a bind financially when you're not cautious. It is more likely that you will end up upside down on loan An extended loan term means you are more likely to be sometime in the near future. Being upside on an auto loan means you are owing more than the vehicle is worth. This is due to the fact that a larger part of your monthly payments at the beginning of the loan will be used to pay interest, rather than the principal owed. In the event of an upside-down loan, it can be risky for a variety of reasons. If you were to have an accident in which the car is considered as a total loss, then you could be left paying off the loan for a car you are unable to drive if insurance doesn't cover the cost. In addition that the longer you're upside-down on the car loan and the longer you're in negative equity. Selling a car with negative equity is a sign that you will not have enough cash to pay off the loan -- and you may even have to you take out. Vehicle depreciation Depreciation is less of an issue for used vehicles during the initial few years. Even so, long-term car loans on used cars usually don't work. A used car likely already has an impressive amount of miles on it and a longer-term loan will allow the miles to pile up even higher. Consider, for instance, that you purchase a car that is three years old that has 36,000 miles and that's the amount the typical American is driving in this amount of time. If you take out a six-year loan and you drive 12,000 miles annually, the standard in America, you would add 72,000 miles. This would mean your car will have 108,000 miles and could be close to 10 years old when it's fully paid off. If you opt to sell it sooner and you find that it's worthless, or worse, that you have no equity whatsoever. The longer-term loans with higher interest typically come with much higher . This is due to the fact that longer loans are riskier for lenders. With a protracted loan duration it is more likely that you'll be affected by a change in your financial circumstances before the loan is paid back in full. Even if the interest rate for the long-term loan is the same as one with a shorter duration, you will still be paying more interest over the course of the loan due to making payments on interest for a far longer period. Although your pocket may be relieved from the reduced amount of interest, the sacrifice might not be worth it. This is an especially important factor to take into account because the Federal Reserve continues to to address pandemic-related inflation. When the Fed increases benchmark rates it raises interest rates offered by private lenders for personal loans as well as auto loans. The average new loan rates for 2022 were 5.16 percent . The rates varied between 3.84 percent for those with the highest credit scores, to 12.93 percent for borrowers with the lowest or deep subprime scores. Stuck with the same vehicle Before signing off on an auto loan which is as long as 84 months, be sure you've considered whether you will want to drive that same vehicle throughout the duration. Seven years is a very long period of time. Your requirements and needs may change. However, with a longer-term loan you'll be stuck in the same vehicle. In most cases you will have to pay the loan can cost you money. Alternatives to a longer-term auto loan There are other options to purchase a car without taking the risk associated with a lengthy car loan. Rent a car If you're struggling to get accepted for an affordable loan, you may . Leasing can provide more affordable monthly payment. Even those with good credit tend to be more likely to obtain approval for a lease and be driving a fairly new vehicle. The negatives of leasing are something you should take note of. They include restrictions on how many miles you can drive the vehicle during the lease term and fees for excessive wear and tear. Most important most importantly, you'll be required to either return or replace the vehicle when the lease comes to an expiration. Get a co-signer A with excellent credit rating provides prospective lenders with extra reassurance that you will pay off the loan. This makes you more likely to be approved, even if your own credit isn't perfect. Make a high down payment If your goal is to reduce your monthly expenses by making a large down payment is a great alternative. The more you deposit initially and the more affordable the monthly cost will be. Additionally, you will get better rate from the lender. Do you think a long-term auto loan worthwhile? A long-term car loan is usually not an ideal option due to the increased risk to your finances. Although the lower monthly cost on a longer-term car loan might be attractive at first, it is more beneficial to save extra cash to make the amount of down payment, or choose a car that is less costly, so the monthly payment is affordable for a shorter loan. The main point to remember before signing onto a long-term auto loan take into consideration the disadvantages. In addition to costing your more in the duration of the loan and a possible risk of being upside down with the loan . Additionally, your vehicle requirements could change within 5 to 7 years, when you're still paying off that loan. Take a look at alternative to the long-term loans, such as paying a higher down and leasing a car or finding a co-signer whose credit score could help you achieve more favorable loan terms.

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Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers in navigating the details of using loans to buy the car they want.

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Rhys has been editing and writing for Bankrate since the end of 2021. They are dedicated to helping readers gain confidence to manage their finances by providing concise, well-studied information that breaks down complex topics into manageable bites.

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Are titles loans included in bankruptcy? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by providing you with interactive financial calculators and financial tools as well as publishing original and impartial content, by enabling you to conduct research and compare data for no cost to help you make informed financial decisions. Bankrate has partnerships with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this website are provided by companies that pay us. This compensation could affect how and where products are displayed on this website, for example for instance, the order in which they be listed within the categories of listing and other categories, unless prohibited by law for our loans, mortgages,, and other products for home loans. But this compensation does not influence the information we provide, or the reviews you see on this site. We do not include the universe of companies or financial deals that could be available to you.

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Written by Mia Taylor Written by Contributing Writer

Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain confidence to control their finances by providing precise, well-researched and well-researched content that break down complex subjects into bite-sized pieces.

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In 1976, Bankrate was founded. Bankrate has a proven track record of helping people make informed financial decisions.

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Bankrate adheres to a strict code of conduct , so you can trust that we'll put your needs first. Our award-winning editors, reporters and editors produce honest and reliable information to aid you in making the best financial choices. The key principles We appreciate your trust. Our goal is to provide readers with reliable and honest information. We have established editorial standards to ensure this happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you're reading is true. We have a strict separation between advertisers as well as our editorial staff. The editorial team of Editorial Independence Bankrate does not receive any direct payment by our advertising partners. Editorial Independence Bankrate's editorial staff writes in the name of YOU - the reader. Our aim is to provide you the best advice that will help you make smart personal financial decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team is not paid any compensation directly from advertisers and our content is thoroughly checked for accuracy to ensure its truthfulness. If you're looking at an article or review, you'll be able to trust that you're getting reliable and dependable information.

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If you have questions about money. Bankrate can help. Our experts have helped you understand your finances for more than four years. We are constantly striving to provide consumers with the expert guidance and the tools necessary to succeed throughout life's financial journey. Bankrate adheres to strict standards policy, which means you can be confident that our information is trustworthy and accurate. Our award-winning editors and journalists produce honest and reliable content that will help you make the right financial choices. The content created by our editorial staff is objective, factual and uninfluenced by our advertisers. We're honest regarding how we're in a position to provide quality content, competitive rates and helpful tools for you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods and services, or through you clicking certain links posted on our site. Therefore, this compensation may influence the manner, place and in what order products are displayed within the categories of listing in the event that they are not permitted by law. This is the case for our mortgage home equity, mortgage and other home loan products. Other elements, like our own rules for our website and whether a product is offered in your area or at your self-selected credit score range can also impact the manner in which products appear on this website. Although we try to offer a wide range offers, Bankrate does not include specific information on every financial or credit product or service.

If you're struggling with financial trouble or require money to pay bills, can seem like a good way to get cash fast. However, what if your financial problems get out of hand and you end up filing bankruptcy to settle your obligations. What happens to the car you pledged as collateral in exchange for the title loan? If you decide to pursue , it may have the possibility of including your title loan as part of a bankruptcy filing and have the loan dismantled or restructured to provide more manageable payments. But you may also lose your vehicle if you are unable to meet loan repayment terms. Title loans and Chapter 7 bankruptcy Chapter 7 bankruptcy is usually referred to as liquidation. In Chapter 7 filing, unsecured debts are discharged. This includes medical debt, personal loans and even promissory notes. As part of the procedure, your property that is not exempt will be sold, and the proceeds used to pay back creditors. A title loan, however, is not an unsecure debt, but it's a secured debt . If you take out a car title loan, you sign over the vehicle to the lender to secure the loan. In plain English you signed your pink slip your car in exchange for a sum of money. Because it's secured loan the title loan can't be dismantled in a Chapter 7 bankruptcy. "Although the laws of each state differ however, generally all secured loans remain in the same position," says Michael Sullivan who was a former personal finance consultant at Take Charge America, a non-profit credit and financial counseling firm. Because the loan is still in force, you'll have to pay it in totality or negotiate a manageable payment arrangement together with the lender who holds the title loan. If neither option is feasible, you may decide to . There are instances where courts permit titles loans to be dealt with as part of Chapter 7 proceedings, says Lamar Hawkins, a bankruptcy attorney at Guidant Law and member of the Arizona Board of Legal Specialization's Bankruptcy Law Advisory Commission. "The bankruptcy court disfavors loans that are predatory, and title loans are commonly predatory," says Hawkins, adding that in some cases the court may "rewrite the loan to a market rate that is based on the value of the vehicle and also have the lender accept installments over time, so that the borrower can retain the car and use it as the vehicle as a source of transportation." Bankrate tip

Make sure to continue making the payments before, during and after the bankruptcy case is closed to avoid repossession.

Title loans or Chapter 13 bankruptcy Chapter 13 bankruptcy is a restructuring of your debts, and this procedure includes secured debts such as car title loans, and even mortgages. As part of Chapter 13, some unsecured debts may even be granted forgiveness. Those that are not forgiven are reorganized and must be paid back over time. "Chapter 13 lets you create a repayment plan where you pay each month to the trustee. In other words, at the end of the repayment plan, you have paid either the fair market value of your car based on the date when the bankruptcy case was initiated ... or amount owed in the case of lower," says New Jersey bankruptcy attorney Edward Hanratty. In a Chapter 13 filing, you might also be able to reduce the amount of monthly installment payment you're required to make to lower the cost of these payments. If the interest rate on the title loan is excessive, you may also be able to lower the interest rate through your Chapter 13 process, says Dai Rosenblum, a Pennsylvania bankruptcy lawyer. While there is a risk of losing your vehicle as part of Chapter 13 bankruptcy filings, you'll have a lot more options to reduce your debt to prevent that from happening. Talk to your lawyer about the title loan upfront When pursuing bankruptcy with the help of an attorney, you need to disclose all your assets and also all remaining debts and liabilities, which includes your title loan. Not revealing the title loan will only cause more difficulties. "When you file for bankruptcy in bankruptcy, you declare under the perjury penalty that you've included every asset, including the car, and every debt that you have, including your title loan," says Rosenblum. "Also the lawyer cannot fix an issue if they don't be aware of the issue." Additionally, hiding debts during a bankruptcy case could result in its dismissal. "Or in the most extreme scenario, it could result in jail time as a result of bankruptcy fraud" Hanratty says. Hanratty. "It's better to be safe instead of regretting it." The main point is that car title loans can be resolved through bankruptcy, but the method by which the debt is dealt with will depend on whether you're seeking Chapter 7 or Chapter 13 bankruptcy. There are options to have the debt restructured, paying the total debt or transferring your vehicle back to lender. Before you take any action, consult with an attorney in bankruptcy who will help you sort through your options and figure out the most effective course of action.

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Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain confidence to take control of their finances by providing clear, well-researched facts that break down complicated subjects into digestible pieces.

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New Vs. Used Car Calculator

The typical used car costs less than the average new car by around two-thirds. But cost isn't everything -- you must be aware of factors like the amount you drive and the length of time you own it and your lifestyle. To determine if this is the right choice for you, respond to the following questions for tailored advice.

Do you need to buy a brand used or new car? At the simplest level, the latter will cost less. But buying used may also be a compromise on the latest available features. Purchasing new can be the best option if are comfortable spending a bit more money and want top-of-the-line features and lower maintenance costs in the beginning. The benefits of buying vehicles include higher reliability, lower rates of interest and the ability to customize your purchase directly to your needs. But it also carries an increased cost of purchase which is more costly and an increased rate of depreciation. When shopping for new vehicles be sure to before the deadline test drive various versions of the vehicle you are looking at. Considerations when buying used A is that it has no history of driving and potentially expensive maintenance costs. But it will be less expensive, hold cheaper insurance costs and appreciate at a slower rate. If you are looking for a used vehicle, consider a alternative. It will offer the perk of a low cost, but still have the assurance of a vehicle that is well-maintained.

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Is now a good time to purchase a secondhand car? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive financial calculators and tools as well as publishing original and objective content. This allows users to conduct research and analyze data for free to help you make sound financial decisions. Bankrate has agreements with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies who pay us. This compensation can affect the way and when products are featured on this website, for example such things as the sequence in which they be listed within the categories of listing in the event that they are not permitted by law. This applies to our mortgage or home equity products, as well as other products that lend money to homeowners. However, this compensation will have no impact on the information we publish, or the reviews that you read on this site. We do not contain the vast array of companies or financial offers that may be open to you.

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4 min read. Published September 30 2022

Writen by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the details of using loans to buy the car they want.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to control their finances with precise, well-studied information that breaks down complicated topics into manageable bites.

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You can rest assured you can trust us to put your needs first. All of our content was created in the hands of and edited by ,

They ensure that what we write ensures that everything we publish is accurate, objective and trustworthy. Our loans editors and reporters focus on the areas that consumers are concerned about most -- different types of lending options, the best rates, the best lenders, the best ways to pay off debt and more -- so you'll feel safe making a decision about your money.

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Bankrate has a strict policy and rigorous policy, so you can rest assured that we'll put your needs first. Our award-winning editors and reporters produce honest and reliable content that will help you make the right financial decisions. The key principles We value your trust. Our goal is to provide readers with accurate and unbiased information. We have editorial standards in place to ensure that is the case. Our reporters and editors rigorously verify the truthfulness of content in order to make sure that the information you're reading is correct. We maintain a firewall between advertisers as well as our editorial staff. The editorial team of Editorial Independence Bankrate does not receive any direct payment from our advertisers. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our aim is to offer you the best advice that will assist you in making smart personal finance decisions. We adhere to strict guidelines in order for ensuring that editorial content isn't influenced by advertisers. Our editorial team is not paid any compensation directly from advertisers and all of our content is fact-checked to ensure accuracy. If you're reading an article or a review, you can be sure that you're getting credible and dependable information.

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The purchase of a used car has many advantages, including a lower rate of depreciation, lower costs and a less expensive upfront cost. The present state of the new car market reinforces the final point -- new vehicles hit record highs in late summer, making this a good time to consider buying a second-hand car. The current state in the market for used cars The summer ended with high prices. The average used car sold for $28,219 in July, and a similar figure of $29,061 during August as per Kelley Blue Book. However, used vehicles are considerably cheaper than those available on new car dealer lots. Since the onset of the pandemic, the vehicle market has swung dramatically away from normalcy and is slowly creeping back to normalcy with little progress. But it is not all negative. While we are not near the 2021 level of used prices and availability however, we are in a favorable spot to buy used and refurbished vehicles, says Chris Frey, Cox Automotive's senior manager for economic and industry insights. The cost to finance, own and operate vehicles is still in the midst of record-high prices. made by the Federal Reserve make the cost to finance your vehicle more expensive and gas prices are also fluctuating. But financing a used car is still lower than new, at $515 per month as opposed to 667 for the 2nd quarter in 2022, according to . Therefore, by opting for buy a used, less costly vehicle you can save money on your monthly installment. Used car prices are slowing, but only a little Overall, used prices are falling according to Henry Hoenig, a data journalist for Jerry, but not by much. The Jerry team reviewed the best selling vehicles of 2022 and compared them to 2021 models that were lightly used and discovered that "As as of August, just seven of the 10 vehicles were worth more than used than the price of sticker on used models." This means that the prices of used cars are still higher than they have been in the past, but they are on par with the current volatility of the market. The inventory of used vehicles remains larger than it was, because dealers remain in a state of catching up with supply chain issues. Therefore, although prices may be higher than they have previously been, supply of used cars is greater than those of new cars. Inventory for used vehicles has increased by 10 percent to the same time last year, according to the third quarter of Cox Automotive's industry analysis which is a good sign for the coming year. "Prices remain high due to the fact that there's not enough vehicles," Hoenig says. "It's important to remember this isn't like COVID-related shortages like we have experienced." Although manufacturers of other items used daily were able to pick back up relatively quickly, cars are much more difficult to make. It's important to keep in mind that the used car market is driven by people who are getting rid of their vehicles, so when there aren't enough people buying new cars, there can be a domino effect on used car availability later on. Due to these two elements, you could find yourself facing more competition and slightly higher prices for used cars, but that doesn't make buying a second-hand car an undesirable option. Do I need to buy a used vehicle? The decision to buy a used car comes in the form of a need. There is no perfect , especially with numerous macro-environmental factors that are increasing the costs. Since experts believe that inventory of new cars will get back to normal by spring 2023, the majority of motorists don't have the luxury of waiting for prices to drop. If you're looking to purchase a car buying used over new could save you money. The combination of demand for new cars and the limited inventory and interest rates above usual levels can make the cost of a vehicle more expensive either way, but purchasing used vehicles is significantly less expensive. Top 5 questions to ask when buying a secondhand car . Although it is reduced price, it may also bring an additional skepticism that is associated from a car that has no history. To alleviate these worries be sure to ask the appropriate questions to gain an understanding of the background of the new set of wheels. 1. What is the history of ownership of the car? A vehicle with many owners is not necessarily negative, but it could indicate that the car was plagued by major issues that drivers tried to avoid fixing or were unable to fix. Find out from the dealer how many owners the vehicle had, along with the amount of time each driver had it. A lot of owners with short spans of time should cause anxiety. Bankrate tip

You should think about purchasing a vehicle. These vehicles must meet additional requirements created by the manufacturer. They must also be covered against any vehicle defects.

2. Has the car been in any accidents? While it is easy to check a vehicle's accident history on sites like Carfax or AutoCheck but it is better to speak with the dealer in advance. Even if the collision was minor it is important to know how the damage was dealt with and if you'll have to face any consequences in the course of ownership. 3. Do I have access to the maintenance documents? Most authorized vehicle dealerships will have records of the done on a car, but having a conversation with the dealership directly is an effective way to determine the vehicle's care. You should avoid buying an automobile that hasn't been through regular maintenance, as it may cause higher expenses later on. 4. Do you have a clear car title? A clear title to a vehicle states that the car does not have any remaining disputes in regard to its ownership and also confirms that the car has no restrictions that hinder the sale. If the seller can't provide an unambiguous title to the vehicle then consider it an indicator to walk away from the deal. 5. Can I take the vehicle for a test drive? It is vital to test drive the car prior to signing on the dotted lines, especially when it is a used vehicle. Be patient when driving and try to get a feel for the driving experience and the condition of the vehicle. This is also a good opportunity to speak in a more relaxed environment and ask the salesperson questions regarding the vehicle. Next steps Buying used is an excellent way to get behind the wheel of a fairly new car and still save money. And while yes, prices may be higher today but buying used is cheaper than purchasing a brand-new option. The trick to getting the most affordable used car comes down to asking the right questions and for the most favorable financing offer. Learn more

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With a footprint across the country and a large branches network U.S. Bank is the ideal choice for auto loan borrowers who prefer the convenience of personal customer service.

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Navy Federal has been serving military members and their families since 1933 when it first opened in 1933 as a bank serving military personnel.

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Autopay can be described as an internet-based lending marketplace that helps consumers find the most affordable automobile loan financing. You can look up potential loan deals from lenders on their network in a matter of minutes without impacting your score on credit.

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Carvana is available to consumers who are looking to buy a car through Carvana's website. They can get it delivered to their door or via an "car vending machine" within their region.

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LightStream is an internet-based lender that provides unsecured auto loans for automobile purchases as well as used purchases, in addition to auto loan refinancing.

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Pentagon Federal Credit Union, often referred to as PenFed is an institution that provides loans for used and new cars, loans as well as refinancing auto loans along with lease buyout loans.

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Upstart is an internet-based lender that was established in 2012. It has pioneered a new approach to lending by using AI technology to assess risk instead of more conventional underwriting criteria.

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Consumers Credit Union (CCU) is a membership-based credit union that provides used, new and auto refinance loans. While you must be an active member, the acceptance process is just a $5 cost as well as a deposit of $5 or more to the bank account of one.

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Westlake Financial serves drivers looking to finance or purchase their next car and partners with over 30,000 dealerships in all 50 states.

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Capital One offers auto loans for new and used car purchases at certain dealerships. The lender also offers refinancing for current auto loans.

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Tenet, an internet-based EV loan platform, has a simple mission, says the company's founder Alex Liegl, "To help any person who wants to drive electric for less." Founded in 2021, Tenet has already enabled numerous climate-conscious motorists to switch to electric. Tenet offers financing for electric vehicles , along with the option of refinancing existing EV loans.

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USAA is a Texas-based company which serves U.S. military members and veterans, pre-commissioned officers , the spouses, children and kids of each. Members are able to take out auto loans for new and used automobiles and refinance older ones.

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If you want to refinance your vehicle loan, iLending may be the best location to begin. iLending offers refinancing solutions for all vehicles loans with the goal of saving you money.

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MyAutoLoan provides an internet-based platform which allows you to locate the most affordable deals in auto loan financing.

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Credit Direct is a personal loan marketplace that lends both direct and via its trusted network of partners to borrowers searching for loans.

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M&T Bank serves drivers primarily on the east coast in products that range from insurance and credit cards to lending.

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You may have heard of LendingClub for its peer-to-peer (P2P) lending source for personal loans, but it can assist in auto loan refinances. LendingClub provides a unique way of financing.

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CarsDirect is not an direct auto lender instead, it is a marketplace that offers motorists with loan options straight through its network.

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Shift, an e-commerce site, states its goal is to help make the car buying process seamless throughout the entire lifecycle of vehicle ownership -starting with the purchase up to the point of selling. Like its competitors Carvana as well as Vroom, Shift supports a direct delivery system which allows buyers to profit from car buying and financing while sitting at your home.

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Nationwide Bank does not directly provide refinance auto loans to drivers, but it does provide services to customers through its relationship with Axos Bank.

3.7 Score: 3.7 stars out of 5

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Ally Clearlane, a subsidiary of Ally Financial Inc., is a direct lender that offers a simplified digital experience for financing your car for people seeking to refinance their vehicle or to buy out their lease.

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Caribou, formerly was known as MotoRefi provides competitive auto refinance loans through its network of lenders. These lenders range from communities banks to credit unions

3.7 rating: 3.7 stars out of 5

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Auto Credit Express serves as an lender marketplace that primarily serves customers with bad credit and no credit as well as those who have been denied previously because of bankruptcy.

3.7 Score: 3.7 stars out of 5

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PNC Bank is one of the largest banks in the U.S., with more than 2,600 branches spread across the United States.

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3.6 Score: 3.6 stars out of 5

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RateGenius provides an online service that links borrower with lenders who provide auto refinancing. In the average, its customers save $96 per month by refinancing their automobile loan by using RateGenius.

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Vroom, an online used vehicle selling platform. Although Vroom does not provide financing, it does work with more than dozen lending partners to facilitate financing for drivers.

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Fifth Third Bank, a regional financial institution with its headquarters in Cincinnati, offers auto loans for used and new vehicles as well as the ability to refinance auto loans to its members that are enrolled in savings or checking accounts.

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With more than 1,500 branches throughout the U.S., Regions Bank provides auto loans to those who want the convenience of in-person contact, but also have the option of accessing their loan online.

3.5 Rating: 3.5 stars out of 5

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RefiJet is a refinancing firm that caters to individuals seeking more favorable terms for their auto loans and a simpler way to rate shop.

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CarMax offers drivers across the United States who want to purchase pre-owned vehicles. It has recently dove into the realm of remote purchase offering drivers the ease of vehicle delivery and financing on one site.

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Bank of America works directly with authorized dealers across the United States to provide financing for more than two million available vehicles.

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Although the Valley Bank's business practices aren't disclosed online, borrowers can gain access to finance for used and brand new vehicles in person or on the internet with a competitive maximum APR.

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Tresl collaborates with lenders across the U.S. to offer auto finance at affordable rates. It is not an direct lender but an online platform.

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Wells Fargo, a national bank established in 1852, serves customers across the United States. Its suite of products includes personal and commercial banking, investing and loans.

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4 min read. Published 26 October 2022

Written by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely using loans to buy the car they want.

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Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain the confidence to manage their finances through providing concise, well-researched, and clear information that breaks down complex topics into manageable bites.

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In the early part of August 2021, President Biden signed an executive order which stated that half of new cars manufactured within the U.S. should be electric in 2030. So now could be the perfect time to get behind the steering wheel of a green car. If you are considering it, you might be able to save money through a green auto loan. Green auto loan is a finance option for those who purchase low or zero emission vehicles. They typically come with a variety of other advantages. How do you know about green automobile loans? The green vehicle loan can be used to buy eco-friendly cars -- or vehicles that emit less emissions. These cars that are fuel efficient typically fall in the category of hybrid or electric and are available from many manufacturers that range from Ford to Nissan and even Tesla. Green auto loans encourage consumers to look into these environmentally friendly vehicles by providing interest rate reductions along with other advantages. These loans are able to make green vehicles less expensive for those who want to purchase them. For instance, Chevrolet offers a 3.49 percent APR on 60-month loans when purchasing their Bolt EV. In the same way, Ford offers a 3.9 percent APR on loans that extend up to 72 months on its Mustang Mach-E. These rates are less than the current average rates of interest on new auto loans that were between 5.4% and 5.28% at the time of writing in September. You'll need to meet credit and other requirements to qualify for such discounts. What qualifies as a green vehicle? Green cars are one that runs on alternative fuels or electricity instead of diesel or gasoline and is therefore more sustainable to the planet. They offer advantages such as lower CO2 emissions, lower maintenance, fewer fuel stops , and more peaceful engines. A from an study by the International Council on Clean Transportation showed that electric vehicles have the lowest greenhouse gas emissions of any type of vehicle. Based on the research, lifetime emissions of a medium-sized electric vehicle are between 60 percent to 68% less than in the United States. The best green vehicles have the designation of an award to them by the U.S. Environmental Protection Agency to the cars with the lowest emissions for each model year. A lot of lenders use this distinction to determine if your car is eligible for a green auto loan. But, they are more expensive on average cost upfront than conventional cars. Therefore, many states urge motorists to buy these vehicles by . As per Kelley Blue Book, the average cost for electric vehicles will be around $30,000 within the United States in September 2022. However, not all electric cars cost that much, and some luxury models are priced higher. For instance, the starting cost of a 2022 Nissan Leaf is $27,400, however, in 2022, the Tesla Model 3 starts at $48,490. A budget of more than $100,000 for an electric vehicle is also feasible. Tesla Dual Motor Model X Tesla Dual Motor Model X starts at a steep $120,990. Despite the high prices are increasing faster than all other kinds of vehicles as per . How do the green loans differ from traditional auto loans? The green car loan is similar to a conventional car loan you'll be able to get an auto lender, receive an interest rate determined by your credit score, choose a repayment time frame and pay regular monthly interest over the loan term. However, the terms of the two loans could be different. Green auto loans generally have lower rates of interest than conventional loans, either through lower interest rates on base or discount rates. Because green vehicles can be costly, many lenders offer longer repayment terms than conventional auto loans to help reduce the monthly payments. A main defining factor of green auto loans is the location where they're offered. Unlike typical auto loans available to find through banks or online lenders, you're more likely to obtain a green auto loan through an . A. University of Hawaii Federal Credit Union, Verity Credit Union, the Vermont State Employees Credit Union and Verity Credit Union all offer green auto loans. Furthermore, some dealers may also offer green loans from the manufacturer. For instance, Ford offers financing for Mach-E models via local dealerships. Similarly, Chevrolet offers financing for its Bolt models through dealers. Why do green auto loans crucial in 2022? A greener approach to auto loans and vehicles began in the early to mid-2000s, and they're increasing in popularity and aren't slowing. Gas prices are rising, which could to fuel demand, with the cost per gallon averaging around $3.77 in the last week of October. Based on Kelley Blue Book, Americans electric cars will be more popular in the third quarter of 2022 will be more over the same timeframe in 2021. A number of car manufacturers have pledged to helping the federal initiative and encouraging more green car purchases. Ford, General Motors and Stellantis (which has Chrysler as well as Fiat) have committed to boost electric vehicle production. Next steps and where to apply for a green auto loan Before you apply for a green auto loan, make sure your finances are in best shape possible. Try to improve your -- lenders use your credit score, income, and other factors to determine whether you qualify for the loan and the rates they are willing to offer. Then, you can shop around for your new green car loan. Comparing a few rate quotes prior to submitting an application for a loan can help you get the best price. Check out these resources for help as you begin the : PlugStar: is an especially useful tool for those looking to buy a car at the beginning of the process. After entering your ZIP code as well as the desired make and model You'll be able to see estimates of cost along with available incentives, as well as details on local dealerships, and the environmental footprint of your vehicle. EV Life: EV Life's lets you get prequalified with a variety of lenders, and automatically qualify you for incentives and rebates by putting those savings in advance to your monthly payments. Credit unions local credit unions are the best places to begin your search for an environmentally friendly auto loan. Credit unions like JetStream Federal Credit Union, Suncoast Credit Union and MyPoint Credit Union offer interest rates reductions for auto loans for green cars. Talk to the local branch of your credit union for details on available options as you shop for the perfect auto loan. The end result of purchasing a green vehicle can be rewarded in several ways. You could reduce the carbon footprint of your vehicle as well as benefit from tax breaks , and reduce your expenses for fuel. Before deciding to apply for a green car loan, research at three or more lenders and ask about their eligibility requirements, incentives and discounts. Be preapproved to compare fees, interest rates and the monthly payment throughout the duration that you will be paying for the loan. Shopping around could land you an auto loan discount that can save you thousands or hundreds of dollars.

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Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers with the ways and pitfalls of taking out loans to purchase an automobile.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping their readers to manage their finances through providing concise, well-researched, and clear information that breaks down otherwise complicated subjects into digestible pieces.

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How the leasing market is changing Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by providing you with interactive financial calculators and tools, publishing quality and impartial content by allowing you to conduct your own research and compare information for free - so that you can make informed financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The products that are featured on this website are provided by companies who pay us. This compensation may impact how and when products are featured on this website, for example such things as the sequence in which they appear within the listing categories and other categories, unless prohibited by law. Our mortgage and home equity products, as well as other home lending products. This compensation, however, does not influence the information we provide, or the reviews you read on this site. We do not cover the universe of companies or financial offerings that could be available to you.

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3 minutes read. Published on December 8, 2022.

Writen by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ins and outs of securely borrowing money to purchase a car.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain the confidence to take control of their finances with precise, well-studied facts that break down otherwise complicated topics into bite-sized pieces.

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At Bankrate we aim to help you make smarter financial decisions. While we are committed to strict ethical standards ,

This post could contain some references to products offered by our partners. Here's a brief explanation of how we make money .

The Bankrate promise

Established in 1976, Bankrate has a long track experience of helping customers make wise financial decisions.

We've earned this name for over four decades by simplifying the process of financial decision-making

process, and giving people confidence in which actions to take next. process and gives people confidence in the next step.

You can rest assured that we're putting your interests first. All of our content was authored in the hands of and edited by

They ensure that what we write is objective, accurate and reliable. Our loans journalists and editors focus on the things that consumers care about the most -- different kinds of loans available, the best rates, the most reliable lenders, the best ways to repay debt, and more -- so you can feel confident when making your investment.

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Bankrate has a strict policy , so you can trust that we put your interests first. Our award-winning editors and reporters create honest and accurate information to aid you in making the best financial choices. The key principles We respect your confidence. Our aim is to offer readers truthful and impartial information. We have established editorial standards to ensure this is the case. Our reporters and editors thoroughly check the accuracy of editorial content to ensure the information you're reading is true. We maintain a firewall with our advertising partners and the editorial team. Our editorial team doesn't receive direct compensation through our sponsors. Editorial Independence Bankrate's editorial staff writes in the name of YOU - the reader. Our goal is to give you the best advice to aid you in making informed personal finance decisions. We adhere to strict guidelines to ensure that our editorial content isn't influenced by advertisers. Our editorial staff receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. If you're looking at an article or review, you can trust that you're receiving reliable and dependable information.

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You have money questions. Bankrate can help. Our experts have helped you understand your finances for more than four years. We are constantly striving to provide our readers with the professional advice and tools required to succeed throughout life's financial journey. Bankrate adheres to a strict code of conduct , so you can trust that our content is truthful and precise. Our award-winning editors and journalists create honest and accurate information to assist you in making the right financial choices. The content we create by our editorial staff is objective, truthful and is not influenced from our advertising. We're transparent about how we are capable of bringing high-quality content, competitive rates, and useful tools to our customers by describing how we earn our money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the placement of sponsored products and, services, or by you clicking on specific links that are posted on our website. Therefore, this compensation may influence the manner, place and in what order the products are listed within categories, with the exception of those prohibited by law for our mortgage home equity, mortgage and other home lending products. Other factors, such as our own rules for our website and whether the product is offered in the area you reside in or is within your own personal credit score may also influence how and where products appear on this website. While we strive to provide the most diverse selection of products, Bankrate does not include details about every credit or financial product or service.

Many motorists opt to have the ability to switch out their car more frequently and also avoid a significant financial commitment. But while leasing is a very popular option but there's been a decrease in availability. In the peak, nearly 30% of sales were of leased vehicles between 2015 and the year 2019. The lease share is now closer to 13%, according to Cox Automotive. This decrease should cause pause to those in the market, as it could mean more. Why has vehicle leasing decreased? Leasing has been on the decline due to three main reasons. All of them were caused partly by the pandemic and supply chain issues that came after. 1. Leasing is becoming too costly A very appealing aspects of leasing is the advantages it provides as compared to purchasing an equivalent car. Typically leasing costs much less because you pay for the cost of depreciation on your vehicle over the length of the lease, as well as the tax and rental costs -as well as possibly some . On top of this it is an upfront cost that is lower as compared to purchasing. In the second quarter of 2022, it was the case that renting the Honda CR-V cost to lease rather than purchase according to Experian. However, as the cost of vehicles has been rising and the cost of leasing has increased, leasing is no longer a less expensive monthly expense. In the past year, drivers paid on average the same amount to lease a car as one spent on a brand new car loan in 2020 as per Cox Automotive. Many find that this expense negates the main benefit of leasing and leaves the option out of reach. 2. An increase in lease buyouts With fewer vehicles available at dealerships and more expensive , many are choosing to hold on to their leased cars instead of signing up for an entirely new vehicle. This is known as a . As long as they owned the car, owners were able to stay clear of the lease market as well as the higher prices for purchasing. As more and more and more drivers agree to lease buyouts, to the leasing ecosystem. This disruption to the leasing cycle increases the shortage of vehicles. 3. Fewer leasing incentives With fewer vehicles available on the market, dealerships must make back any money lost in other ways. One of these ways is by removing any which were previously available. This is particularly relevant to vehicle leasing. This means that with more expensive costs and fewer incentives to make the deal more appealing leasing loses a lot of its appeal. Buying used might be more expensive The shift in the leasing market will have ripple effects on cars too. If more people hold on to their leased cars, it limits the market for used vehicles to a extent. Leased vehicles that aren't renewed to be leased usually end being sold on the market for used cars. Because there are fewer of these vehicles that are reentering the round and recirculating, there'll likely be fewer used cars available to buy. If you, like the majority of drivers do not have the privilege of waiting to purchase, consider . It is worth the extra effort to get preapproved or could help you save money in the long run. Should you buy or lease in 2023? The choice to buy or lease comes down to your individual preferences and requirements. You should consider the pros and cons of leasing or buying your next car. Lease

Buy

Cost

Leasing tends to carry smaller monthly payments, and also smaller amounts of money to put down at first.

It is possible that you will need to put more money down in the beginning and then spend more every month.

Ownership

You won't fully own the vehicle until you make an agreement to buy out the lease.

Once the loan is paid off you are fully owned by the car.

Restrictions

You'll be restricted regarding the amount of miles you can drive in your ownership, usually between 10,000 and 15,000 miles.

There are no restrictions for the vehicle's miles or other limits regarding driving.

Additional costs

Depending on the lease you may have to pay "wear and tear" fees based on general vehicle upkeep.

The owner is responsible for any maintenance expenses that arise in the course of ownership.

Each option has advantages and disadvantages. Whichever option you pick you should be prepared to spend more in the coming year. This is especially notable in the case of leasing, because it, unlike in the past, can cost close to the cost of buying a vehicle.

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Authored by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the details of taking out loans to purchase the car they want.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers to manage their finances through providing clear, well-researched information that breaks down complicated subjects into bite-sized pieces.

Auto loans editor

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How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and, services, or when you click on specific links on our site. This compensation could affect the way, location and when the items appear in listing categories, unless it is prohibited by law for our mortgage and home equity products, as well as other home loan products. Other factors, such as our own website rules and whether a product is available within the area you reside in or is within your own personal credit score could also affect how and where products appear on this website. Although we try to provide an array of offers, Bankrate does not include specific information on each financial or credit item or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |

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