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Best Car Loans for First-Time Buyers

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Interested in purchasing a car? As a first-time buyer, understanding all the terms and requirements of a car loan can be a challenge. To make it easy for you, we’ve gathered together some of the best car loans for first-time buyers, no matter what type of car you’re purchasing. 

Let’s take a look at each lender’s key specs, the pros and cons of these companies, and why we’ve chosen them as the best. 

Best Car Loans for First-Time Buyers of 2023

Best for Most Kinds of Borrowers : AUTOPAY



  • APR Range: As low as 2.99%
  • Loan Amounts: $2,500–$100,000
  • Loan Terms: 2–8 years
Pros & Cons
  • No payments for 45 days

  • Starts with a soft pull

  • Multiple lending partners

  • Unclear about maximum loan APRs

  • Minimum 24-month loan

Why We Chose It

AUTOPAY wins for most when it comes to best auto loans for first-time car buyers. There are a few different reasons for this, including the variety of loans it covers, the ability to draw from multiple lenders, and a very low Annual Percentage Rate (APR). 

The benefits with AUTOPAY begin at application. Rather than going straight in with a hard credit pull, the company starts with what’s called a soft pull. This allows potential creditors to see your credit score and provide pre-qualified without affecting your credit score. If you’re not sure what types of loans for which you’d be eligible, this can help clarify your options quickly and easily. 

Thanks to its ability to work with multiple lenders, you’ll be able to choose the loan that best fits your needs. This also means that you may have better success with Autopay than with some other lenders if your credit score isn’t the best. 

Finally, AUTOPAY works across a variety of car loans. This is true whether you’re purchasing new, used, from a dealer, from a private party, or looking to buy out a lease. 

Borrower Qualifications
  • Minimum credit score/range: 500
  • Minimum income: Depends on lender
  • Maximum DTI ratio: Depends on lender
  • Employment qualifications: Depends on lender
  • Autopay is available in all 50 states plus Washington D.C.
Vehicle Qualifications
  • Maximum loan-to-value ratio: Not disclosed
  • Maximum accepted mileage: 150,000
  • Maximum accepted age of vehicle:10 years
  • Private-party vehicle purchases are allowed

Best From a Big Bank : Chase Auto

Chase logo
  • APR Range: 6.49%–18%
  • Loan Amounts: $4,000–$1,000,000
  • Loan Terms: 4–6 years
Pros & Cons
  • No down payment required

  • High loan limit

  • Starts with a “soft” credit pull

  • No private party financing

  • Relatively high APRs

  • Dealer must be in the Chase network

Why We Chose It

As the largest bank in the United States, Chase has the resources and the reach for all your financing needs. This is one reason why we’ve chosen the company as the best for large lenders. 

Other reasons include the ability to apply for up to $1,000,000 in financing, which is 10 times more than you’d receive with competitor AUTOPAY. If you’re in the market for an exorbitantly priced vehicle and have the means to afford such a purchase, Chase is a good option. This is also thanks to its financing terms—although they’re expensive even for those with excellent credit, you won’t pay more if you’re financing large amounts. 

If you’re an existing customer with Chase, you may also be eligible for special offers; these aren’t disclosed on its lending website. Instead, you’ll need to log in to your account to see what options are available. 

Borrower Qualifications
  • Available for applicants with excellent (740+) to fair (619 and below) credit
  • No need to have a Chase account to acquire an auto loan
Vehicle Qualifications
  • Maximum loan-to-value ratio: 140%
  • Maximum accepted mileage: 120,000
  • Maximum accepted age of vehicle: 10 years
  • Private-party vehicle purchases are not allowed
Customer Reviews*
  • “My overall experience has been good. I don't really have anything else to compare to, because this is the first loan I got. I didn't actually go looking for it. My old car broke down, so I needed a new one, and instead of renting one, I thought I'd just buy one…. So I went to a dealer. and Chase was just sort of what they gave me. I didn't really go through other options.

“So there really wasn't that much of an issue. It was easy, mostly because it was through the dealer.” 

  • “[Managing my loan] is pretty easy since it's just on autopay right now on Chase itself. I also use Chase as my main bank, so it's easy. It's on the app. I can see it under loans and lines of credit right there. And it's on autopay. So I don't really think about it. It's really easy.”

*Customer reviews were collected from an independent survey of 1,016 current, past, and prospective auto loan borrowers.

Best for Military Members and Vets : Navy Federal

Navy Federal Financial Group

Navy Federal Financial Group

  • APR Range: As low as 4%
  • Loan Amounts: A minimum of $250
  • Loan Terms: 3–8 years
Pros & Cons
  • Discount for military members and their families

  • 100% financing available 

  • Private party or dealer financing 

  • Funding methods are limited

  • Not available to everyone

  • Unclear maximum APRs

Why We Chose It

As a member-owned and not-for-profit credit union, Navy Federal offers military members and their families special rates for all types of banking. 

This is showcased especially for eligible active duty members, whose loans Navy Federal has chosen to limit to just 4%. This beats their otherwise advertised rate of 4.54%–which is available to all qualified members. Even if you’re not eligible for the 4% rate, active duty or retired veterans can still receive a 0.25% discount on auto loans with direct deposit, helping to drop the cost of monthly payments. 

That being said, the only ways to receive your funds are by check, which can either be disbursed at a local branch or mailed to you. This is a much slower alternative than a digital deposit and may be unwieldy in a fast-moving car market. 

Borrower Qualifications
  • Special 4% interest rate for active duty military
  • Must be a member of Navy Federal Credit Union
  • Must provide proof of income 
  • Available in all 50 states
Vehicle Qualifications
  • Used or new vehicles
  • Maximum loan-to-value ratio: 125
  • Maximum age of 20 years

Best for Online-Focused Buying Experience : Carvana



  • APR Range: 6.85%–16.46%
  • Loan Amounts: Up to $80,000
  • Loan Terms: 3–6 years
Pros & Cons
  • Available to most buyers

  • Completely online

  • Seven-day money-back guarantee

  • Requires a down payment

  • Only available for Carvana vehicles

  • Unable to use a credit card

Why We Chose It

Carvana is as simple as it gets when it comes to purchasing a car online. The entire process, including financing and delivery of your vehicle, can be completed without leaving the comfort of your home. 

In addition to this, Carvana finances just about everyone; you only need to be over 18, have no active bankruptcies, and make over $4,000 per year in order to qualify. This makes obtaining a car loan viable for most people, even with bad credit

However, Carvana also requires that you place a down payment with your purchase, so you’ll need to have cash on hand. And unlike many dealers, Carvana doesn’t accept credit card payments for your down payment. 

That being said, it’s still possible to get discounts on your auto loan with Carvana. Setting up autopay can reduce both your monthly payment and your APR. 

Borrower Qualifications
  • Must have a Carvana account
  • Minimum credit score/range: 500
  • Minimum income: $4,000 per year
  • Available in 48 continental states; may incur a delivery charge. 
Vehicle Qualifications
  • Maximum loan-to-value ratio: Not disclosed
  • Maximum accepted mileage: 140,000
  • Maximum accepted age of vehicle: Varies

Best for Buying Used : CarMax

CarMax logo


  • APR Range: 5%–24%
  • Loan Amounts: Up to $100,000
  • Loan Terms: 3–6 years
Pros & Cons
  • 30-day money-back guarantee

  • Includes additional warranty

  • Multiple finance sources

  • May charge a shipping fee

  • Unable to use a credit card

  • No negotiating price

Why We Chose It

CarMax bills itself as the haggle-free used-car dealer. Its strategy works—with 243 locations across the United States, there are thousands of cars from which to choose. 

CarMax offers its own financing, but also provides buyers with other lenders, including Capital One, Chase, Santander, Ally Bank, and more. This means that those with less-than-perfect credit will likely be able to find a loan option that works. 

When it comes to the best used car loans for first-time buyers, CarMax comes out ahead. This is thanks to its 30-day money-back guarantee on all its cars. As long as the vehicle is in the same condition and has been driven less than 1,500 miles, you can return it for a refund. The company also provides a 90-day/4,000 mile limited warranty on all its cars. 

Borrower Qualifications
  • No minimum credit score
  • Must provide proof of income
  • Available in 41 states
Vehicle Qualifications
  • Only used cars
Customer Reviews*
  • “I've been satisfied with the products that I've gotten there. I've bought, and my family has bought more than one car from them, and I've got friends who have, so I think it's pretty well-run. And I've been happy with the warranties on the repairs two cars ago.”
  • “...Over the years I started buying from CarMax, maybe about 15 years ago, and had used the same salesman, usually. But this time it was during COVID when I got the car and they were trying to do everything that they could online. They would have even brought the car to me. If I picked it online they would have driven it to me and had me fill [out] the paperwork in my house. But because I was in a different state, they didn't do that.”
  • “If I was going to do something differently, I'd probably check and see if [my] credit union had lower interest rates. … But that's the only thing I would do differently, is … go for something with a lower interest rate.”

*Customer reviews were collected from an independent survey of 1,016 current, past, and prospective auto loan borrowers.

Final Verdict

If you’re looking for the broadest range of auto loan options, AUTOPAY is a sound choice. With industry-leading rates as low as 2.99%, the most qualified buyers are able to take their financing anywhere. 

However, those in the military will want to take a hard look at Navy Federal Credit Union, since it preemptively lowers APRs to just 4% while allowing you to keep all your banking in a single location. 

Meanwhile, those committed to big banking should check out Chase, whose specialized offers and large loan limit can provide options where others can’t.

Finally, both Carvana and CarMax compete in the used car space, but Carvana shines when it comes to the online experience, while CarMax offers superior warranties and a longer money-back guarantee. 

Guide to Choosing the Best Car Loans for First-Time Buyers

Factors to Consider When Choosing a Car Loan

When you’re shopping for a car loan, whether with a bank, a credit union, or via the dealer, keep your eye on a few key factors.

  • Interest rate or APR: Interest is what you pay the lender for the loan, and the less you can pay in interest, the less you’ll pay for the car over time. Annual Percentage Rate, or APR, is the interest rate plus any fees you’ll pay to originate or administer the loan. When comparing rates, compare APRs to make sure you’re comparing all the costs.
  • Fees: Most lenders charge a fee to originate or generate the loan. You’ll see this reflected in the loan’s APR.
  • Maximum loan amount: This is the maximum amount you can borrow, based on your lender’s estimation of your risk. You will most likely see this as a dollar amount and occasionally as a loan-to-value ratio, such as 90% or 105%. Because your loan is backed by collateral (your car), the ratio shows how much of the car’s value the lender is willing to lend for.
  • Credit requirements: Some lenders will have tighter (or looser) credit requirements. Shop around with several lenders to find ones that will work with your credit score and deliver the best rate.
  • Vehicle requirements: Particularly if you are buying used, lenders will have vehicle requirements, such as a maximum age (10 years, for example), or maximum mileage (120,000). As with other loan features, these vary by lender.

How First-Time Buyer Programs Work

Some dealers or manufacturers may offer specialized first-time buyer programs. Some dealers or manufacturers may offer specialized first-time buyer programs. This can include additional rebates or discounts on your loans, as well as a simpler process for getting approved. 

Before applying for one of these programs, be sure that the terms fit your needs. Shop around for other rates. Just because you’re a first-time buyer doesn’t mean that you’ll need to use one of these loans; you may be eligible for better rates elsewhere. 

Frequently Asked Questions

  • What interest rate will I get as a first-time car buyer?

    The interest rate that you’ll receive when purchasing a car will vary on a number of factors, including:

    • The type, size, age, and mileage of the vehicle you pick
    • Your credit history 
    • Your residence, income, and employment information
    • Your down payment
  • What is a good monthly payment for a first car?

    Your car payment should not be a large financial burden. Generally speaking, you’ll want to keep your monthly payment at or below 15% of your net monthly income. This doesn’t include other expenses such as gas, insurance, and maintenance.

  • Can you get a loan on a car if you have no credit history?

    It’s possible to get a car loan even if you have no credit history or a poor credit history. Some lenders, such as Carvana, simply require that you make at least $4,000 per year, meet a minimum age requirement, and don’t have any active bankruptcies. However, your interest rate may be higher if you don’t have any established credit history.

  • Should you buy new or used for your first car purchase?

    The best way to save money on a car purchase is to buy a used car. Although you may face higher interest rates on a loan, the lower cash cost of the vehicle can more than make up the difference. 

    Ultimately, the decision to buy used or new will be up to you, but in either scenario you’ll want to shop around for the best rates and opportunities.


Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs.

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