Wednesday, 21 May 2025

Loans to Buy or Refinance Your Car: Everything You Need to Know

1. Introduction 

Buying or refinancing a car is one of the most common financial moves many people make—yet it's also one of the least understood. At first glance, an auto loan might seem simple: you borrow money to buy a car and pay it back over time. But dig a little deeper, and you'll find a complex world of interest rates, lender types, loan terms, refinancing strategies, and credit factors that all influence how much you'll pay—and how smoothly the process will go.

At Finance Nest Aware, we’re committed to helping you make smart money decisions. That includes giving you all the tools and knowledge you need to navigate car loans and refinancing with confidence. Whether you’re buying your first vehicle, looking to upgrade, or trying to reduce your monthly payments by refinancing, this guide is your complete roadmap.

We’ll break down:

  • The basics of auto loans and refinancing

  • The difference between new and used car loans

  • How to qualify and apply

  • Where to get the best financing deals

  • Tips to improve your credit and reduce costs

  • How to avoid scams and shady lending practices

No matter your credit history or financial goals, there’s a way to get into the driver’s seat without wrecking your budget. Let's dive in.

2. Understanding Auto Loans 

What Is an Auto Loan?

An auto loan is a type of installment loan used specifically to purchase a vehicle. Like other loans, you borrow a specific amount of money (called the principal) and repay it over time

with interest. These loans typically have terms ranging from 24 to 84 months (2 to 7 years).

How Do Auto Loans Work?

When you take out an auto loan, your lender pays the seller—usually a dealership or private party—on your behalf. In return, you agree to make regular monthly payments. Each payment includes:

  • Principal – The portion that goes toward repaying what you borrowed.

  • Interest – The cost of borrowing money, expressed as an annual percentage rate (APR).

Your interest rate is influenced by factors like your credit score, income, loan term, and the age of the vehicle.

Secured vs. Unsecured Auto Loans

Most auto loans are secured, meaning the car itself is collateral. If you default on the loan, the lender has the right to repossess the vehicle. Unsecured loans, while less common for cars, don’t require collateral and usually come with higher interest rates.

Key Components of an Auto Loan

  • Loan Amount (Principal): The amount you finance.

  • APR (Annual Percentage Rate): The total cost of borrowing, including fees.

  • Loan Term: The time you have to repay the loan.

  • Monthly Payment: Your regular installment amount.

  • Down Payment: A lump sum paid upfront to reduce the loan amount.

Why a Down Payment Matters

A higher down payment means:

  • Lower monthly payments

  • Less interest paid over time

  • Less risk of being “underwater” (owing more than the car is worth)

Generally, a down payment of 10–20% is recommended, especially for new vehicles.

The Total Cost of a Car Loan

It’s easy to focus only on the monthly payment, but be sure to consider the total cost. A lower monthly payment may seem appealing, but a longer loan term could mean paying thousands more in interest.

3. New Car Loans vs. Used Car Loans 

New Car Loans

Pros:

  • Lower interest rates (lenders view new cars as less risky)

  • Manufacturer incentives (cash rebates, special APR offers)

  • Full warranty coverage

  • Latest technology and safety features

Cons:

  • Higher purchase prices

  • Rapid depreciation (a new car can lose 20-30% of its value in the first year)

  • Longer loan terms can lead to negative equity

Used Car Loans

Pros:

  • Lower overall cost

  • Slower depreciation

  • More affordable insurance rates

Cons:

  • Higher interest rates (lenders see used cars as higher risk)

  • Shorter loan terms

  • Potential maintenance issues, especially with older vehicles

  • Limited or expired warranties

Loan Differences

FeatureNew Car LoanUsed Car Loan
APRLowerHigher
Loan TermUp to 84 monthsUsually up to 60 mo
Vehicle ValueHigher (new)Lower (used)
Depreciation RiskHighLower

Certified Pre-Owned (CPO) Vehicles

CPO cars offer a middle ground. They're used vehicles that have been inspected, refurbished, and certified by the manufacturer. These typically come with warranties and lower interest rates than regular used cars, making them a smart option for budget-conscious buyers.

Would you like me to continue with Sections 4–6 next?

These will cover:

  • The Auto Loan Process Explained

  • Refinancing Your Car Loan: What It Means

  • Reasons to Refinance Your Auto Loan

4. The Auto Loan Process Explained 

Buying a car is exciting—but securing financing can be overwhelming if you’re unprepared. Here’s how the auto loan process works from start to finish.

Step 1: Check Your Credit Score

Before you start car shopping or applying for loans, review your credit report. Your credit score directly impacts the interest rate and terms you’ll be offered. A higher score = lower rates.

Tip: You can get a free credit report annually from Equifax, Experian, and TransUnion .

Step 2: Get Pre-Qualified or Pre-Approved

  • Pre-qualification is a quick estimate of what you might qualify for based on limited information.

  • Pre-approval is a more formal process that involves a credit check and provides a firm loan offer.

Pre-approval gives you leverage at the dealership and can help you stick to a budget.

Step 3: Apply for a Loan

You can apply online, at a dealership, bank, or credit union. You’ll need:

  • ID (driver’s license or passport)

  • Proof of income (pay stubs or tax returns)

  • Proof of residence (utility bill or lease agreement)

  • Vehicle info (if refinancing or purchasing a specific car)

Step 4: Loan Underwriting

Once you submit your application, the lender reviews your:

  • Creditworthiness

  • Income

  • Employment status

  • Debt-to-income ratio

They’ll determine your interest rate, loan amount, and term based on risk factors.

Step 5: Final Loan Offer

If approved, the lender will issue a formal loan offer. Review it carefully, paying close attention to:

  • APR (Annual Percentage Rate)

  • Total cost of the loan

  • Loan term (length)

  • Monthly payment

Once you accept the terms, the lender will release funds to the seller, and you’ll begin your monthly payments.

5. Refinancing Your Car Loan: What It Means 

Refinancing your car loan means replacing your current auto loan with a new one—often with better terms.

When Should You Consider Refinancing?

Refinancing makes sense if:

  • Interest rates have dropped since you took your original loan

  • Your credit score has improved

  • You need a lower monthly payment

  • You want to change your loan term

How Does Refinancing Work?

Here’s a simplified breakdown:

  1. Apply for a refinance loan with a new lender (or your current one).

  2. If approved, the new lender pays off your existing loan.

  3. You begin making payments to the new lender under the updated terms.

Benefits of Refinancing

  • Lower Interest Rate: Can save you hundreds or thousands over the life of the loan.

  • Lower Monthly Payments: Extending the term lowers the amount due each month.

  • Change Loan Term: Switch from a 72-month loan to a 48-month loan to save on interest.

  • Remove a Co-signer: If your credit has improved, you may no longer need a co-signer.

When Refinancing May Not Help

  • If your existing loan has a prepayment penalty

  • If your vehicle is too old or has high mileage

  • If your credit hasn’t improved

  • If you owe more than the car is worth (negative equity)

Real Example:

Original loan:

  • $18,000 at 8% APR for 60 months → $364/month

Refinanced loan (after credit score improved):

  • $15,000 at 4% APR for 48 months → $339/month
    Savings: $1,200+ in interest over the loan term

6. Reasons to Refinance Your Auto Loan 

Let’s break down the most common reasons people refinance their car loans—and whether it’s right for you.

1. Lower Your Interest Rate

This is the #1 reason people refinance. Even a 1-2% drop in interest can save you hundreds or even thousands.

Example:
$20,000 at 7% APR over 60 months = $3,800 in interest
Refinance to 4% = $2,100 in interest
Savings: $1,700

2. Lower Your Monthly Payment

If your budget is tight, refinancing for a longer term can reduce your monthly bill. Just be aware this may increase the total interest paid over time.

3. Improve Your Cash Flow

Lower monthly payments free up cash for:

  • Emergencies

  • Other debts

  • Saving or investing

This can be a smart move in times of financial stress.

4. Remove a Co-Signer

If someone co-signed your original loan, you might want to refinance under your own name—especially if you’ve improved your credit.

5. Switch Lenders

Maybe you don’t like your current lender’s service, or perhaps your bank now offers better auto loan terms. Refinancing gives you the option to start fresh with someone new.

6. Pay Off the Loan Faster

You might want to reduce your loan term from 72 to 36 months, pay it off quicker, and save big on interest.

When Refinancing Isn't Ideal:

  • If your car’s value has dropped significantly

  • If your current loan has high early repayment fees

  • If your credit is worse now than before

Summary:

Reason to RefinanceBenefit
Lower APRLess total interest
Lower monthly paymentsBetter budget management
Remove a co-signerMore financial independence
Shorten or extend loan termFlexibility to meet new goals
Switch lendersBetter customer service or terms

7. How to Qualify for a Car Loan or Refinance 

Qualifying for a car loan or refinancing depends on several key financial factors. Understanding what lenders look for can help you boost your chances of approval and get better rates.

1. Credit Score

Your credit score is one of the most important indicators of how risky you are as a borrower.

Credit Score Ranges:

Score RangeRatingLoan Impact
750–850ExcellentBest interest rates
700–749GoodCompetitive rates
640–699FairModerate rates
600–639PoorHigher rates
Below 600BadMay require a co-signer or high APR

2. Income and Employment

Lenders want to know that you can afford your loan. They'll check your:

  • Monthly income

  • Employment history

  • Job stability

Some may require proof of income such as:

  • Recent pay stubs

  • Tax returns (if self-employed)

  • Bank statements

3. Debt-to-Income (DTI) Ratio

This ratio compares your total monthly debt payments to your monthly income. A lower DTI means you're less of a risk.

Ideal DTI for Auto Loans: Below 40%

Formula:
(Total Monthly Debt ÷ Monthly Gross Income) × 100

Example:
$1,500 in monthly debt ÷ $4,000 in income = 37.5% DTI

4. Loan-to-Value (LTV) Ratio

Lenders also look at how much you’re borrowing compared to the value of the car.

Formula:
(Loan Amount ÷ Car’s Value) × 100

If you’re borrowing $18,000 for a car worth $20,000, your LTV is 90%. Lower LTVs reduce lender risk and improve approval odds.

5. Vehicle Requirements

Some lenders have rules about the vehicle’s:

  • Age (usually not older than 10 years)

  • Mileage (typically under 100,000–150,000 miles)

  • Condition (must pass inspection if refinancing)

6. Co-Signers

If your credit isn’t great, a co-signer with good credit can help you qualify or get better terms. But remember, they’re on the hook if you miss payments.

8. Interest Rates: Fixed vs. Variable 

Interest rates affect how much you’ll pay for your loan. Understanding the difference between fixed and variable rates is crucial.

Fixed Interest Rates

These stay the same throughout the life of the loan.

Pros:

  • Predictable monthly payments

  • Easier budgeting

  • Protection from market rate increases

Cons:

  • May start higher than variable rates

Best for: Buyers who prefer stability

Variable Interest Rates

These fluctuate based on market trends or benchmark rates like the prime rate.

Pros:

  • Lower initial rate

  • Potential for savings if interest rates drop

Cons:

  • Payments may increase

  • Unpredictable over time

Best for: Short-term borrowers who can handle changes

Choosing the Right Rate

FeatureFixed RateVariable Rate
Monthly PaymentStays the sameCan change over time
Risk LevelLowModerate to high
Budgeting EaseEasyMore complex
Good ForLong-term loansShort-term or savvy users

9. Where to Get a Car Loan or Refinance 

There are several places to secure a car loan or refinance your current one. Each option comes with pros and cons.

1. Banks

Pros:

  • Trusted institutions

  • May offer bundled deals for existing customers

Cons:

  • Stricter credit requirements

  • Slower application process

Best for: Borrowers with good credit and existing banking relationships

2. Credit Unions

Pros:

  • Lower interest rates

  • Personalized service

  • More flexibility with credit scores

Cons:

  • Must become a member

  • May have fewer branches or online tools

Best for: Buyers with fair credit or seeking better rates

3. Online Lenders

Pros:

  • Fast, convenient applications

  • Easy rate comparison

  • Often competitive rates

Cons:

  • Less personalized service

  • Not all online lenders are reputable—research first

Best for: Tech-savvy borrowers who want quick results

4. Dealership Financing

Pros:

  • Convenient—offered on the spot

  • Promotional offers like 0% APR or cash back

Cons:

  • Often includes markups

  • Can be more expensive than pre-approved loans

Best for: Buyers who qualify for special deals and want one-stop shopping

5. Loan Marketplaces

Sites like LendingTree and AutoPay connect you with multiple lenders so you can compare rates.

Pros:

  • Access to many lenders at once

  • Time-saving

Cons:

  • May involve soft or hard credit pulls

  • Could receive follow-up calls/emails

Would you like me to move on with the next sections?

Coming next:

  • 10. Tips to Get the Best Auto Loan or Refinance Deal

  • 11. Mistakes to Avoid When Financing a Car

  • 12. What to Know About Loan Terms and Total Cost


10. Tips to Get the Best Auto Loan or Refinance Deal 

Getting a great deal on your auto loan or refinance isn’t just about shopping for the cheapest interest rate. It’s also about being prepared, comparing offers wisely, and timing your application right.

1. Check and Improve Your Credit

Your credit score has a huge impact on the loan offers you receive. Before applying:

  • Pay off debts to lower your credit utilization

  • Avoid applying for new credit cards or loans

  • Dispute any errors on your credit report

Tip: Even a 20-point improvement in your score can save you hundreds over the life of the loan.

2. Get Pre-Approved Before Shopping

Getting pre-approved gives you negotiating power and lets you compare dealer financing with outside offers. It also sets a realistic budget so you don’t overextend yourself.

3. Shop Around

Never take the first offer. Compare:

  • Banks

  • Credit unions

  • Online lenders

  • Dealerships

Even a small difference in interest rate can lead to big savings.

Example:
A 0.5% lower APR on a $20,000 loan over 5 years = ~$275 saved.

4. Negotiate the Loan Terms

You can often negotiate:

  • Interest rate

  • Loan term

  • Fees (application, documentation, etc.)

If you’ve received multiple offers, use them as leverage to get better terms from your preferred lender.

5. Don’t Focus Only on Monthly Payments

A lower monthly payment might seem appealing—but if it’s due to a longer loan term, you’ll end up paying more interest.

Compare the total loan cost, not just the monthly bill.

6. Avoid Add-Ons You Don’t Need

Dealerships may try to sell you:

  • Extended warranties

  • GAP insurance

  • Paint protection

  • Service packages

These are often overpriced. Get these services elsewhere, if you need them.

7. Refinance at the Right Time

If you’re looking to refinance:

  • Wait at least 6–12 months after your original loan

  • Make on-time payments to build positive history

  • Refinance before the car loses too much value

11. Mistakes to Avoid When Financing a Car 

Auto loans are common, but mistakes during the process can cost you thousands. Here are the most common pitfalls—and how to avoid them.

1. Skipping the Pre-Approval Process

Without a pre-approval, you’re at the mercy of whatever financing the dealer offers. It’s harder to negotiate and easier to overpay.

2. Ignoring the Total Cost of the Loan

Focusing only on monthly payments can lead you to accept longer terms and higher interest rates. Always check the total repayment amount.

Bad deal example:
$350/month for 84 months = $29,400
On a $22,000 car, that’s $7,400 in interest!

3. Accepting the First Offer

Don’t settle. Shop multiple lenders, even if you’re in a rush. Use loan marketplaces and comparison tools to your advantage.

4. Financing for Too Long

Long-term loans (72–84 months) mean lower payments, but they also:

  • Accumulate more interest

  • Leave you underwater (owe more than the car’s worth)

  • Keep you tied to the loan for years

Stick to 60 months or less if possible.

5. Not Reading the Fine Print

Watch for hidden fees, prepayment penalties, or balloon payments. Read the loan agreement carefully—and ask questions.

6. Not Making a Down Payment

Zero-down financing sounds great, but it often leads to:

  • Higher monthly payments

  • Greater interest paid

  • Negative equity early in the loan

Aim to put down at least 10–20%.

7. Forgetting About Insurance and Taxes

Monthly payments are just part of the cost. Don’t forget to factor in:

  • Car insurance

  • Registration and title fees

  • Sales tax

  • Maintenance and fuel

12. What to Know About Loan Terms and Total Cost 

The loan term you choose affects how much you’ll pay per month and overall. Let’s break down how terms and interest interact.

Loan Term Basics

  • Short-Term Loans (24–48 months):

    • Higher monthly payments

    • Lower interest cost overall

    • Build equity in the car faster

  • Long-Term Loans (60–84 months):

    • Lower monthly payments

    • Higher total interest

    • More risk of negative equity

Total Cost Example

Loan AmountAPRTermMonthly PaymentTotal Interest
$25,0005%36 mo$749$2,000
$25,0005%72 mo$403$3,975

Same loan, different term = nearly double the interest.

Rule of Thumb: The 20/4/10 Rule

  • 20% down payment

  • 4-year term max

  • 10% of your income for car expenses (loan + insurance)

This helps ensure your car purchase doesn’t overwhelm your finances.

Should You Pay Off a Car Loan Early?

Pros:

  • Less interest paid

  • More money freed up monthly

  • Improves your debt-to-income ratio

Cons:

  • Some loans have prepayment penalties

  • Could reduce liquidity (cash on hand)

Tip: Check your loan agreement or ask your lender if there’s a penalty for early payoff.

Use Online Loan Calculators

These tools help you visualize:

  • Monthly payments

  • Total loan cost

  • How extra payments affect the timeline

Try tools like:

  • NerdWallet

  • Bankrate

  • Credit Karma

13. Should You Lease or Finance a Car? 

When shopping for a car, one big question many people face is: Should I lease or finance? Both options can get you behind the wheel, but the long-term cost, ownership, and flexibility are very different.

What Is Leasing?

Leasing is like renting a car for a fixed number of years (usually 2–4). You make monthly payments, follow mileage and wear restrictions, and return the car at lease-end—or buy it.

Pros:

  • Lower monthly payments

  • Drive a new car every few years

  • Warranty often covers most repairs

  • Minimal or no down payment

Cons:

  • You don’t own the vehicle

  • Mileage limits (typically 10,000–15,000 miles/year)

  • Wear-and-tear fees

  • Penalties for early termination

What Is Financing?

Financing means taking out a loan to buy the vehicle. You own it outright once you pay off the loan.

Pros:

  • Build equity over time

  • No mileage restrictions

  • Customize, sell, or keep the car as long as you want

  • More cost-effective in the long run

Cons:

  • Higher monthly payments

  • Responsible for maintenance after warranty expires

  • Depreciation hits you directly

Lease vs. Finance Comparison

FeatureLeasingFinancing
OwnershipNo (return at lease end)Yes (once paid off)
Monthly PaymentLowerHigher
Mileage LimitsYesNo
CustomizationNot allowedAllowed
Long-Term CostsHigher if leasing repeatedlyLower over time
EquityNoneBuilds over time
Ideal ForShort-term driversLong-term value seekers

Which Option is Best for You?

Lease if you:

  • Like driving new cars every few years

  • Want lower monthly payments

  • Don’t drive a lot annually

Finance if you:

  • Want to build ownership

  • Plan to keep the car long-term

  • Don’t want to deal with mileage limits

14. Loan Scams and Red Flags to Watch Out For 

Unfortunately, auto financing can attract shady lenders. Whether you're borrowing to buy or refinance, it’s crucial to recognize scams and protect your financial future.

1. “Guaranteed Approval” Ads

Red flag: No legitimate lender guarantees approval without checking credit, income, or vehicle details.

Why it’s dangerous: These lenders often charge massive fees or hide predatory terms in the contract.

2. Bait-and-Switch Tactics

How it works: You’re promised a low rate, but when you show up, the rate has suddenly “changed.”

Solution: Get all loan terms in writing before visiting the dealership.

3. Yo-Yo Financing (Spot Delivery Scam)

This occurs when the dealer lets you drive off the lot before finalizing the financing. Later, they claim your loan wasn’t approved and pressure you into a worse deal.

Avoid it by:

  • Insisting on finalized paperwork before taking delivery

  • Getting financing separately beforehand

4. Hidden Fees and Add-Ons

Shady dealers might add items to your loan without your knowledge:

  • Extended warranties

  • Theft recovery systems

  • Appearance packages

Solution: Carefully review the loan breakdown. Ask for a full itemized list before signing.

5. Prepayment Penalties

Some predatory lenders penalize you for paying your loan off early.

Tip: Always ask about prepayment penalties and check the fine print.

6. Unrealistic Loan Terms

Watch for:

  • 96-month loans

  • APRs over 20%

  • Loans on vehicles older than 10 years

These often signal a predatory setup.

7. What to Do If You Suspect a Scam

  • Report to the Consumer Financial Protection Bureau (CFPB)

  • Contact your state attorney general

  • Leave online reviews to warn others

15. Final Thoughts and FAQs 

Let’s wrap things up with a quick recap and answers to common questions people have about car loans and refinancing.

Final Thoughts

Buying or refinancing a car with a loan is a big financial step. But when you:

  • Understand how car loans work,

  • Know where to shop,

  • Avoid common traps, and

  • Compare your options wisely…

You’re in a much stronger position to save money, build credit, and drive a vehicle that fits your budget.

Whether you’re buying your first car or lowering your monthly payments with a smart refinance, preparation is key.

Frequently Asked Questions (FAQs)

Q1: Is it better to get a car loan through a bank or dealership?

A: Banks usually offer lower rates, but dealership promotions can be competitive if you qualify. Always compare both before committing.

Q2: Can I refinance a car loan with bad credit?

A: Yes, but it’s harder. Look for lenders that specialize in bad credit refinancing, and consider using a co-signer to improve your odds.

Q3: How soon can I refinance my car loan?

A: You can typically refinance after 6 months—once the loan is seasoned and you've built some positive payment history.

Q4: What’s the best credit score to get low car loan rates?

A: A score of 700 or above will usually qualify you for competitive rates. The best rates go to those with 750+.

Q5: How much should I put down on a car?

A: Aim for at least 10–20%. A higher down payment reduces your monthly payment and total interest cost.

Q6: Is refinancing worth it if my loan is almost paid off?

A: Not usually. The savings may be minimal. But if you’re in financial trouble and need to lower payments, it could help short-term.

Q7: Can I refinance if I’m upside down on my loan?

A: It’s harder, but possible with lenders who offer negative equity refinancing. You may need to roll over the difference or make a large down payment.

Q8: What’s the average car loan interest rate in 2025?

A: As of early 2025, average APRs are around:

  • New cars: 6.5%–7.5%

  • Used cars: 8%–10%

  • Refinance loans: 5.5%–8.5% (depending on credit)

Q9: Can I finance a used car over 10 years old?

A: Some lenders allow it, but rates are typically higher. Consider credit unions or specialty lenders.

Q10: Should I pay off my car loan early?

A: Yes—if there are no penalties and you’ve already paid off higher-interest debts. It saves you money on interest.

Encourage Comments & Feedback

Invite your readers to share their questions and experiences with auto loans in the comments section. It builds community and can increase time spent on your blog.

  1. Investment and Insurance Products are:

    • Not Insured by the FDIC or Any Federal Government Agency
    • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank
    • Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

Related footnotes:

  1. Displayed rates are our lowest Annual Percentage Rates (APR), available on 36 month terms, apply to dealer purchases and vehicle refinancing, and include a discount for optional automatic payments (0.25%). Rates and terms subject to change without notice. Rates vary based on approved credit and other factors, such as term, model year, loan amount, and loan purpose. Monthly payments vary based on APR for which borrower is approved, term for which vehicle is financed, and amount borrowed. Financing for 36 to 60 month terms require a financed amount of $5,000 or greater and approved credit. Financing for 72 month terms requires financed amount of $15,000 or greater and approved credit. Financing for 84 month terms is available on new auto loans (model years 2024 to 2026) and used auto loans (model years 2018 to 2023) and requires financed amount of $25,000 or greater and approved credit. Maximum loan amounts apply and are subject to change without notice.

    New Car (dealer) Payment Example: A 36 month new auto loan (model years 2024 to 2026) with an annual percentage rate (APR) of 6.40% would have monthly payments of $30.60 per one thousand dollars borrowed.

    Used Car (dealer) Payment Example: A 36 month used auto loan (model years 2018 to 2023) with an annual percentage rate (APR) of 8.92% would have monthly payments of $31.76 per one thousand dollars borrowed.

    Old Car (dealer) Payment Example: A 36 month used auto loan (model years 2017 and older) with an annual percentage rate (APR) of 9.54% would have monthly payments of $32.05 per one thousand dollars borrowed.

  2. While refinancing your current loan could result in a reduced rate and/or payment, choosing an extended term may cost you more in the long run.  If you are currently receiving Servicemembers Civil Relief Act (SCRA) benefits or protections, your refinanced loan may no longer be eligible for benefits or the associated protections.

  3. Restrictions apply. Subject to approval.

  4. Obtaining insurance from USAA is optional, and has no effect on any credit applications or terms of credit with USAA Federal Savings Bank, and can be acquired from other sources.

  5. Potential average savings based on countrywide survey of new customers who switched to United Services Automobile Association and self-reported savings from March 6, 2025 to April 4, 2025. Individual savings may vary and isn't guaranteed.

Related footnotes:

  1. Use of the term "member" or "membership" refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA. Restrictions apply and are subject to change.

  2. Auto Insurance underwritten by United Services Automobile Association (USAA), USAA Casualty Insurance Company, USAA General Indemnity Company, Garrison Property and Casualty Insurance Company, based in San Antonio, Texas; USAA S.A. (Europe), and USAA S.A. UK Branch (United Kingdom), and is available only to persons eligible for P&C group membership. Each company has sole financial responsibility for its own products.

    Coverages subject to the terms and conditions of the policy.

  3. "USAA Bank" means USAA Federal Savings Bank.

  4. Bank products offered by USAA Federal Savings Bank, Member FDIC. Credit card, mortgage and other lending products not FDIC-insured.

  1. Investment and Insurance Products are:

    • Not Insured by the FDIC or Any Federal Government Agency
    • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank
    • Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

Related footnotes:

  1. Displayed rates are our lowest Annual Percentage Rates (APR), available on 36 month terms, apply to dealer purchases and vehicle refinancing, and include a discount for optional automatic payments (0.25%). Rates and terms subject to change without notice. Rates vary based on approved credit and other factors, such as term, model year, loan amount, and loan purpose. Monthly payments vary based on APR for which borrower is approved, term for which vehicle is financed, and amount borrowed. Financing for 36 to 60 month terms require a financed amount of $5,000 or greater and approved credit. Financing for 72 month terms requires financed amount of $15,000 or greater and approved credit. Financing for 84 month terms is available on new auto loans (model years 2024 to 2026) and used auto loans (model years 2018 to 2023) and requires financed amount of $25,000 or greater and approved credit. Maximum loan amounts apply and are subject to change without notice.

    New Car (dealer) Payment Example: A 36 month new auto loan (model years 2024 to 2026) with an annual percentage rate (APR) of 6.40% would have monthly payments of $30.60 per one thousand dollars borrowed.

    Used Car (dealer) Payment Example: A 36 month used auto loan (model years 2018 to 2023) with an annual percentage rate (APR) of 8.92% would have monthly payments of $31.76 per one thousand dollars borrowed.

    Old Car (dealer) Payment Example: A 36 month used auto loan (model years 2017 and older) with an annual percentage rate (APR) of 9.54% would have monthly payments of $32.05 per one thousand dollars borrowed.

  2. While refinancing your current loan could result in a reduced rate and/or payment, choosing an extended term may cost you more in the long run.  If you are currently receiving Servicemembers Civil Relief Act (SCRA) benefits or protections, your refinanced loan may no longer be eligible for benefits or the associated protections.

  3. Restrictions apply. Subject to approval.

  4. Obtaining insurance from USAA is optional, and has no effect on any credit applications or terms of credit with USAA Federal Savings Bank, and can be acquired from other sources.

  5. Potential average savings based on countrywide survey of new customers who switched to United Services Automobile Association and self-reported savings from March 6, 2025 to April 4, 2025. Individual savings may vary and isn't guaranteed.

Related footnotes:

  1. Use of the term "member" or "membership" refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA. Restrictions apply and are subject to change.

  2. Auto Insurance underwritten by United Services Automobile Association (USAA), USAA Casualty Insurance Company, USAA General Indemnity Company, Garrison Property and Casualty Insurance Company, based in San Antonio, Texas; USAA S.A. (Europe), and USAA S.A. UK Branch (United Kingdom), and is available only to persons eligible for P&C group membership. Each company has sole financial responsibility for its own products.

    Coverages subject to the terms and conditions of the policy.

  3. "USAA Bank" means USAA Federal Savings Bank.

  4. Bank products offered by USAA Federal Savings Bank, Member FDIC. Credit card, mortgage and other lending products not FDIC-insured.

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