Capital One is a Fortune 500 company and one of the 10 largest financial institutions in the United States based on deposit amounts. The bank services over 45 million customers across their banking and credit card verticals, and they’re well known for popular financial products like their Capital One 360 checking account.
While Capital One’s banking products and rewards credit cards probably come to mind first, the company also boasts a robust selection of auto loans for consumers who want to purchase a vehicle or refinance a car loan they already have. Capital One even lets you get pre-qualified for an auto loan without an impact to your credit score, and you can use your new auto loan at over 12,000 dealerships around the U.S.
Capital One Auto Loans: Key Takeaways
- Interest rates start at 3.79% for new car loans.
- Refinance your current auto loan with a new rate between 4.33% and 24.99%.
- New car loans start at $4,000, and you can qualify for a refinance loan between $7,500 and $50,000.
- Repay your auto loan with a repayment term of your choosing between 36 and 72 months.
- Auto Navigator loan program lets you get pre-qualified and shop at participating dealerships.
Capital One Auto Finance: Affordable Loans for New and Used Cars
Capital One offers affordable auto loans for consumers with nearly all tiers of credit, although there are some restrictions.
For starters, the Capital One Auto Navigator loan for car purchases is only good at about 12,000 participating dealers nationwide — as in, you cannot use this loan to purchase a car from an individual. Once you’re pre-qualified with Capital One, you can shop around for a car on their website or look up participating dealers and shop for a new or used car in person. Pre-qualification doesn’t guarantee you’ll receive financing or any specific terms; it is only meant to provide you with an idea of whether you can qualify, the amount you can qualify for, and the interest rate you may end up with.
When it comes to the type of cars these loans work for, Capital One only offers new or used car financing on autos up to 12 years old depending on the state. Maximum vehicle mileage is also set at 120,000 miles, and purchase loan amounts start at $4,000.
You can also refinance an auto loan you already have with Capital One — a move they say could save you up to $50 per month compared to your current payment.
To qualify for a refinance, the vehicle must be seven years old or newer and you must be up to date on payments. You can borrow between $7,500 and $50,000 with a refinance, and you can only use these loans for new and used cars, light trucks, SUVs, and minivans for personal use.
- Related: Should You Refinance Your Auto Loan?
What to Watch Out For
The main downside of Capital One auto loans is the fact you can only use their purchase loans at participating dealers. They let you get pre-qualified for an auto loan without a hard inquiry on your credit report, but you’re limited in terms of where you can use your loan proceeds. If you want to buy a truck off a friend or happen to find a car you want to buy at a small boutique dealership that doesn’t partner with Capital One, you can’t use this loan.
Their loans are also limiting in other ways, including the fact Capital One doesn’t finance vehicles in Alaska or Hawaii. Also note that, while Capital One offers interest rates starting at 3.79% for purchase loans, the best rates and terms only go to consumers with very good credit, which is usually considered anyone with a FICO score of 740 or higher. Customers may qualify for the best rates with slightly lower scores, but those with “average” credit or “poor” credit will wind up paying considerably higher interest rates for the same loan.
Finally, Capital One does require a minimum income of $1,500 to $1,800 a month for their auto loans, and that requirement can surge based on the amount you want to borrow.
Who Capital One Auto Loans are Best for:
- Anyone with great credit who can qualify for their lowest rates and best terms.
- Consumers who want to get pre-qualified to see how much they can borrow without a hard inquiry on their credit report.
- People who don’t mind using their loan at a participating dealership.
- Refinancing customers with great credit who need to get into a new auto loan with a lower interest rate and better terms.
How We Rate Capital One Auto Financing
At The Simple Dollar, we aim to provide a general overview of a lender’s products and services through a standard rating process. After a thorough research and discovery period, here’s how Capital One stacks up:
|Capital One Auto Loans at a Glance|
||Affordability (interest rates, fees, and terms)|
|Availability (credit requirements, geographic reach)|
|Ease of Use|
How to Apply for an Auto Loan from Capital One
Whether you are ready to apply for an auto loan, Capital One keeps the process simple by letting you apply online. With their Auto Navigator program, you can get pre-qualified for a car loan using the application on the Capital One website. Information you’ll need to provide to get pre-qualified includes:
- Your name
- Email address
- Social Security number
- Phone number
- Home address
- Length at residence
- Employment information
- Gross annual income
With your pre-qualification letter in hand, you can shop for a car at any participating dealer. When you find the car you want, you’ll complete the full loan application with Capital One and the dealership will help you apply the loan funds to your auto purchase. In summary, applying for an auto loan from Capital One isn’t that different from using dealer financing other than the fact they let you get pre-qualified for your loan online before you shop.
The Bottom Line
If you’re ready to buy a new or used car but you prefer to get financing from a bank you know and trust, Capital One auto loans are worth checking out. Interest rates can be low for consumers with excellent credit, and you can use your loan to purchase a vehicle from more than 12,000 dealerships nationwide. You can even refinance an auto loan you already have to get a lower rate — either to save money on interest, pay your car off faster, or both.
On the flip side, you may want to consider another loan if you need more flexibility in how the funds are used. And if you want the option to buy from any dealership or purchase a car from an individual, you’ll need to look for a different auto loan altogether.
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