Guide: Finding the Best Auto Loan Companies and Auto Lenders

If you want to get around most towns, you are going to need a car, and in order to afford a car, many people need auto lenders.  

Auto finance companies furnish the funds people need in order to afford the cars that allow them to get to work, run errands, and shuttle children to and from school.

As a result, people are extremely anxious to find the best auto loan companies and work with auto loan lenders that are flexible and that they can trust. Knowing the best place to get an auto loan is valuable information.

There are approximately 214 million licensed drivers in the United States, which means it is fair to say that there are a lot of people shopping for or currently paying off auto lenders.

This article is perfect for those who are feeling overwhelmed wading through advertisements from all of the auto finance companies out there that say they are the best place to get an auto loan. In the following, we will summarize how to shop smart and explore offerings from some of the best auto loan companies.

According to CNN, American car buyers now owe a whopping $1 trillion dollars and counting to auto lenders, which is the first time that the country’s drivers have ever owed so much.

If the amount of financing tells us anything, it is that consumers are definitely finding what they think are the best car loan companies.

Experian, the credit rating agency, reports that 86 percent of Americans finance their car purchases through auto finance companies. Credit buys cars, and people want options when it comes to choosing the best auto loan companies.

When searching for car lenders, potential borrowers are not just looking for low interest rates from the best car loan companies – although that is certainly one of the most sought-after features when looking for the best place to get an auto loan.

The best car loan companies offer attractive features, a wide variety of packages, quick approvals, and quality customer service in addition to low interest rates.

This review of car loan lenders and the best auto finance companies will also take into consideration the different credit scores that individuals may be going to auto lenders with and how they can better structure their car loan search.

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Auto Finance Companies: How to Get the Best Deal from Auto Lenders

Before you even settle on specific auto lenders, thinking they are from the best auto finance companies, you can already begin to employ specific strategies to ensure you get the best deals from auto finance companies. In order to “shop smart,” you need the willingness to resist the easy route, do your research, and hustle for better deals from auto loan lenders.

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CNBC provides five solid tips for shopping smart that consumers can use when approaching auto lenders. These tips are listed to help consumers bring their A-game to their conversations and negotiations with auto finance companies.

1. Check your credit reports

This is extremely important when shopping for any kind of credit, so those individuals searching for auto lenders will definitely need to do this. Your credit report details your credit history, and this is the documentation that auto finance companies will be consulting when they decide whether they want to extend you a loan or not.

Be sure to check with all three of the credit reporting agencies: Experian, Equifax, and TransUnion. When you are shopping around for auto lenders, you do not want to play it lazy and brush this task aside – checking all three is extremely important when searching for car loan lenders.


It’s a toss-up exactly which credit reporting agency the auto finance companies you apply to will check. You could check with Experian and verify that there are no errors on your credit report only for the auto loan lenders to check with TransUnion where there is an error on your credit report that makes you look like an unappealing prospect.

This may cause the rejection of your applications to these car loan lenders or an offering of an unattractive interest rate. It is not far-fetched; it is a possibility.

Everybody is entitled to one free credit report from each of these three agencies through Checking your credit reports from all three agencies and verifying that the credit history and information reported is correct is a vital first step when preparing to search for auto lenders and auto finance companies.

The importance of checking your credit reports when looking for the top auto loan lenders becomes even more apparent when you consider that your credit score is derived from these credit reports. Financial institutions – and that includes those top auto finance companies you are hoping to get a nice rate from – simply do not have the time to go through everybody’s credit history. Instead, the best auto finance companies use something called a credit score.

Think about it this way. Your credit report is stuffed with information, and it is all different kinds of information that people like auto lenders have to consider. What determines your trustworthiness more? That you have a limited credit history, which might demonstrate that you are good at budgeting the money you have and rarely rely on credit? That you have an extensive, almost ludicrous credit history and credit usage but you always make your payments on time?

This is a simplistic way of laying out all of the different factors professionals at the top auto finance companies have to take into consideration when determining whether somebody is “worthy” of a certain amount of money for their project or enterprise. Your credit score uses a particular formula to account for multiple barriers (i.e., credit history, length of credit history, and diversity of credit). The final number you are given is a rapid way for auto lenders and other lenders to determine how trustworthy you are.

Auto finance companies may not bother checking with credit reporting agencies and opt to get your credit score instead. That credit score is determined by using the information made available by one of the three credit reporting agencies.

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2. Don’t leave financing for the dealer to provide

Many individuals wait until they are at the car dealership to go through the details of financing their car. Car dealerships often get individuals in the door by promising attractive features, like super competitive interest rates, when, in fact, those features are most likely only available for individuals with exceptional credit scores. No matter your financial situation, instead of taking what the car dealer has to offer, shop around for the best auto loan companies and see what the top auto loan lenders have to offer.

Never assume that the deal you are being offered by your auto lenders is the only deal available. Even if you do decide to follow through with one, you can actively ensure that your decision is still the best one by continuing to shop around and compare against other auto finance companies. Never feel guilty about backing out of any auto loan lenders’ offers if you find something better before signing.

3. Look for shorter loans

It can be tempting to seek longer loans from auto lenders because it stretches out the amount of time it takes to pay off your car lenders, but it drives up your total cost in the long run. Additionally, auto finance companies typically charge higher interest rates for longer loans.

Choosing a smaller time period in which to pay back your auto lenders may sound unappealing because of the higher monthly payments, but it will definitely get you out of debt faster and provide more incentive to allocate your money better. Sometimes, car owners go to auto finance companies looking for longer loan periods, not because they cannot afford to pay it off sooner, but because they would rather have a higher amount of disposable income. Do not make this mistake. Commit to budgeting your income and paying off your car lenders, and then you can return to more frivolous spending habits.

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4. Do not get “scammed” into agreeing to a higher interest rate

This is perhaps one of the most useful pieces of advice that CNBC provides among its tips for shopping smart with auto lenders and when looking for the top auto loan lenders. Many car dealerships do not consider the car purchase final until the money from the auto finance companies is in their accounts, and this transfer of funds can take anywhere from a few hours to a few days.

Typically, this stipulation (that the sale is not final until the money has been given to the dealership) is found in the paperwork. A lot of car dealerships that offer financing in-house will get you to sign off on a lower interest rate and then call you after you have taken the car to say that the auto loan lenders did not sign off on the loan.

What are you left to do now? Well, the car dealership will tell you to come back in and return the car or you can work with them to negotiate a higher interest rate for the auto lenders. If you hesitate with this, you are told that you will probably lose the deposit you provided and even be charged a rental fee for the time that you have been using the vehicle.

It is a rather unsavory situation and one that causes a lot of people to simply agree to a higher interest rate through the auto finance companies to save themselves from further trouble.

In order to avoid this and protect yourself from additional charges from the car lenders, you can make an arrangement with auto lenders outside of the car dealership, or you can refuse to take the car until the auto finance company has finalized the financing.

5. Don’t fall into the trap of the low monthly payment

This is another useful piece of advice when it comes to haggling with auto lenders and finding the top auto finance companies. Oftentimes, people buying a car assume that if the monthly payment is low, they are getting a good deal. This arrangement is often meant to distract you from the fact that you are getting cheated on your trade-in and fleeced when it comes to your financing.

Do not bother answering when the sales associate asks you how much you can afford to pay each month to the auto finance companies because this is a way of manipulating you into taking what is probably a less ideal package for what seems like a cool low monthly payment.

Make sure to do your research and negotiate when it comes to your interest rate and trade-in cost.

Finding Auto Finance Companies That Suit Your Needs

As mentioned, everybody has unique circumstances when it comes to their search for auto lenders. You may have a not-so-great credit score, or you may only be able to afford a specific loan type. There are different auto finance companies you can explore in order to find the best auto loan companies for you. These are options for people in different situations.

Auto Loan Companies

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CarsDirect – For Those Shopping Around for Smaller Loans From Auto Lenders

CarsDirect is more popularly known as a place for buying cars, but there is also a tool on the website for finding loans from the best auto loan companies.

In addition to ample information on car ownership, CarsDirect provides helpful resources related to auto loan lenders, including a loan calculator and a calculator for finding your car’s trade-in value.

Additionally, there is no minimum loan amount on this site, so you can look for small loans from the best auto loan companies on this site.

The pesky thing about this service for those looking for the best auto loan companies for them: it’s a lead generator. After entering your information to find the deals you need, you will most likely start fielding calls and inquiries from a lot of auto finance companies, and this can be exceptionally annoying.

Weigh the usefulness of the service against the potential irritation of sales calls from several different auto lenders. This may also be a necessary evil for you if you have a lower credit score and need to look for car lenders who are flexible.

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U.S. Bank for Those Who Want the Flexibility of Online Services with the Comfort of a Big Bank

Not interested in online portals to look for auto lenders? Fair enough. The drawback to working with larger institutions is that they often offer less flexibility than online auto finance companies. U.S. Bank, however, does offer a variety of loan types.

It also offers a lot of extremely helpful resources and information for consumers on auto loan lenders and the lending process. U.S. Bank offers variety and competitive interest rates.

Another aspect of U.S. Bank that may make it more attractive to car buyers than other auto finance companies is that U.S. Bank provides loans for individuals buying cars from private sellers. Typically, larger financial institutions do not fund these. Even if the car you are buying is used, you are not automatically penalized for it with U.S. Bank in the way you might be if you work with other auto lenders (you would receive a higher interest rate). Instead, your car must just meet certain mileage and age specifications.

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LightStream for “Top-Notch” Borrowers Looking for Auto Lenders

LightStream is a division of Sun Trust Bank that deals in auto loans. There are interest rates as low as 1.99 percent for cars. Among auto lenders, it has some of the most attractive features, including a $100 guarantee for unsatisfied borrowers.

If within the first 30 days of signing up for a loan you decide you are not happy with the company, you fill out a questionnaire on your experience and receive $100. Among other auto finance companies, LightStream comes with some serious perks.

However, those perks come at a cost. Unlike other auto finance companies, LightStream is not eager to get just anyone – it wants the best customers.

In order to access the perks of LightStream, which includes a matching offer to other auto lenders, you must have terrific credit and a relatively high income. Among the best auto loan companies, it can be considered a VIP company.

It is not impossible to navigate the auto lenders market, but if you want to walk away with the best deal possible, you will have to do a little research. There are a number of tools available online when it comes to finding the best auto loan companies, so you are not solely limited to in-person auto finance companies.

However, if you do prefer the traditional “branch” experience, that option is available through banks like U.S. Bank and even Bank of America, where you can explore a variety of lending options offered throughout their many branches.

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