Despite interest rates starting to notch upward, car buyers can still land some pretty low interest rates — just how low, though, depends on a shopper’s location.
Using its interest rate database and auto loan rates from July 24, GoBankingRates.com yesterday put out a list of the 10 best states for auto financing. Michigan was No. 1 with 3.03%, while North Carolina ranked No. 10 with 3.31%.
GoBankingRates aggregated the base interest rates on all new-car loan products in the country, and then averaged them by state to come up with the ranking. It also listed the top lenders who offered the lowest interest rates for common loan terms.
Here are the Top 10 states and those aforementioned lenders. Credit unions, particularly Navy Federal Credit Union and USAA Federal Savings Bank (FSB), dominated the list, showing up in nearly every Top 10 state.
Below the list is GoBankingRates.com’s full state-by-state breakdown of interest rates last month. Rhode Island had that highest interest rate with 5.11%.
1. Michigan — 3.03%
36-month loans: Community West Credit Union — 1.49%
48-month loans: Navy FCU — 1.49%
60-month loans: Michigan Educational Credit Union — 1.75%
2. Oregon — 3.04%
36-month loans: First Community Credit Union (FCCU) — 0.99%
48-month loans: USAA FSB — 2.24%
60-month loans: FCCU — 1.49%
3. Alaska — 3.04%
36-month loans: Navy FCU — 1.49%
48-month loans: USAA FSB — 2.24%
60-month loans: Navy FCU — 1.79%
4. New Hampshire — 3.08%
36-month loans: New Hampshire Federal Credit Union — 1.37%
48-month loans: New Hampshire FCU — 1.37%
60-month loans: New Hampshire FCU — 1.37%
5. South Carolina — 3.15%
36-month loans: Navy FCU — 1.49%
48-month loans: USAA FSB — 2.24%
60-month loans: Navy FCU — 1.79%
6. Vermont — 3.17%
36-month loans: Navy FCU — 1.49%
48-month loans: USAA FSB — 2.24%
60-month loans: Navy FCU — 1.79%
7. Oklahoma —3.23%
36-month loans: Navy FCU — 1.49%
48-month loans: USAA FSB — 2.24%
60-month loans: Navy FCU — 1.79%
8. Utah — 3.28%
36-month loans: Navy FCU — 1.49%
48-month loans: USAA FSB — 2.24%
60-month loans: Navy FCU — 1.79%
9. Washington — 3.29%
36-month loans: Navy FCU — 1.49%
48-month loans: Global Credit Union — 1.75%
60-month loans: Global Credit Union — 1.75%
10. North Carolina — 3.31%
36-month loans: Navy FCU — 1.49%
48-month loans: Truliant Federal Credit Union — 1.99%
60-month loans: Navy FCU — 1.79%
My comment was that if the high rates are justified – prove it. If you can prove it, then the banker will get “Trustworthy points” and thanks for the community service. Now if the people with bad credit and no credit do not have the ability to pay for the loan when the loan is made, why is it being made? Or why is it being made for so much?
If you cannot prove it, then the banker is abusing the public – again!
While I have not asked the current auto finance bankers to prove it on this topic, I did recently in the past on credit card rates and fees. They could not prove it, were judged abusive by the public, and had the Credit Card Act shoved down their throats.
Does “high risk lending” or is it “stupid lending” that includes extended term financing so that the buyer has no equity until year #5 and usually has no equity in his trade-in on the next car. Which one is it that allows the sale of “independent warranty insurance” that fails to deliver and is overpriced? Which one is it that finances the dealer no value add-ons? Etc, etc.
Have you ever been in the coffee room at an auto dealership and listened to the boastful chatter of a salesman that was discussing how they “laid away” that car buyer? I have. “Laid away” is the polite words for their actual verbage that also means “Abused” which was the topic of this chat.
Shame on the bank that let them get away with it. When I ran the auto finance division at a major bank, I would not allow that to be part of the financing package. And I was very successful in volume goals, losses, and profitability.
Interesting that they are all credit union types or USAA.
Unless they have a dealer network, price is their primary differentiation to generate loans.