Capital One auto loans review (2023)

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Pros and cons of Capital One auto loans

Capital One auto loans

Capital One offers a small range ofauto loan interest rates,and rates start relatively low. With this lender, people with low credit scores could get a good deal, as long as the required minimum credit score of 500 is met.

For people with an eye on an affordable used car, Capital One's low minimum financing amount of $4,000 could make it easier to find a car that fits your budget and financing options —many other lendershave higher minimum loan requirements.

However, keep in mind that you do have to make a purchase through a dealership that works with Capital One to use this lender.

How Capital One auto loans work

Capital One auto loans are only available at certain dealerships. While this lender does have a wide array of dealers available, there's no option for other financing for private party purchases, and this could limit your ability to purchase from some independent dealerships. Information on dealers that work with this lender isavailable on Capital One's website, and is worth checking out in advance if you want to work with a certain dealership or find a specific vehicle.

Loan terms range from 24 to 84 months and loans are available in the contiguous 48 states.

Other requirements include:

• A minimum income between $1,500 and $1,800 a month, depending on credit
• A minimum financing amount of $4,000
• Used vehiclesmust be model year 2011 or newer and have less than 120,000 miles. However, Capital One states that financing may be available for vehicles model year 2009 or newer and with 150,000 miles.

A Capital One auto loan might be for you if you have a nonprime (between 601 and 660) or subprime (between 501 and 600) credit score. In these credit categories, borrowers may be rejected by many lenders or offered high interest rates.

Capital One works with borrowers with credit scores as low as 500. Auto loan interest rates at Capital One tend to start lower than the typical interest rates, and could help people in this credit category get lower interest rates, too.

However, Capital One doesn't have detailed information on interest rates or fees available on its website. While most other lenders will state the range of interest rates available to prospective customers or information on loan fees, Capital One does not make that information publicly available.

To contact Capital One's customer support, call the company Monday through Friday from 9 a.m. to 8 p.m. ET. Capital One is also reachable by mail and also has a lengthy list of answers tofrequently asked questions.

Is Capital One trustworthy?

Capital Oneisrated an Aby the Better Business Bureau. The BBB, a non-profit organization focused on consumer protection and trust, determines its ratings by evaluating a business' responses to consumer complaints, honesty in advertising, and clarity about business practices.

Keep in mind that a top-notch BBB score doesn't ensure you'll have a good relationship with a company.

Capital One does have one recent controversy. The US Treasury Departmentfined Capital One $80 millionafter the Office of the Comptroller of the Currency said the bank's poor security around its cloud-based services helped to account for a 2019 data breach in which a hacker accessed over 140,000 social security numbers and 80,000 bank account numbers.

How Capital One auto loans compare

To compare Capital One to the competition, we looked at lenders with similar credit score requirements that allowed customers to get pre-qualifications before going to a dealership.

Capital One has an advantage over Bank of America for borrowers looking for affordable used cars. While Bank of America has a minimum loan amount of $7,500, Capital One only requires minimum loans of $4,000. Bank of America will finance cars valued as low as $6,000, but the $7,500 minimum loan amount means thatborrowers could be underwater, or have a loan worth more than the car's value.

Bank of America auto loansare a good option for current customers, as interest rate discounts are based on customer relationships with the bank and categorized by status. Customers with gold, platinum, or platinum honors status will receive up to 0.5% off their auto loan's APR. But, status requirements mean that discounts are only available to customers with three-month average balances of $20,000 or more.

If you have a good orexcellent credit score, you might want to consider LightStream. Its rates don't go too high — for a 36-month loan for a new car purchase between $10,000 and $24,999, interest rates range from 2.49% to 6.79%. However, borrowers with lower credit scores may find better rates elsewhere.