Shopping for a car can be both exciting and hectic. It is always fun to browse the inventory for a new (or new to you) vehicle.
But along with the pleasure of shopping comes the hassle of getting an auto loan. You never know what the experience will be like, which can cause confusion and stress.
But what if you could eliminate some of that confusion? That’s what we’re going to do with our Capital One Auto Loan Review for 2020.
Table of Contents:
How Do Capital One Auto Loans Work?
One nice thing about Capital One Auto Finance is that it does not perform a hard inquiry on your credit report.
That means you can get qualified for a Capital One car loan and it won’t impact your credit score.
When you’re ready to get started with Capital One Auto, its Navigator tool will show you all the offer terms.
Additionally, you can search their database for the car you want through their approved dealerships. Once you’ve found your car, take your offer to the dealership to complete the process.
Keep in mind that being pre-qualified does not automatically guarantee approval for financing. Additionally, your final terms will depend on the hard credit inquiry performed by the dealership.
At this point, you can choose to use either the Capital One Auto Finance option or what the dealership has to offer.
The Capital One Auto Navigator will also help you determine your baseline interest rate before you head to the dealership. This way, you’ll have a solid idea of what interest rate you’ll get.
It also helps you estimate your monthly payment, so you’ll know in advance what works best for your budget.
The Pros and Cons of Capital One Loans
Here are the benefits and drawbacks of using Capital One Auto Finance:
- Get pre-qualified without taking a hit on your credit. Capital One Auto allows you to complete a brief application to determine your auto loan eligibility. Since it is a soft credit hit, it won’t do any damage to your credit.
- Capital One Auto Finance provides a quick financing calculator on its site. If you do not want to mess with an application, you can fill in the calculator to get a good idea of what you will pay before you apply.
- Capital One’s Auto Navigator lets you view vehicles and rates before you buy them. It helps aid you in the car-buying experience from beginning to end.
- Compare rates based on the type of car you want. You can find the best deals and prices available as you shop for your preferred vehicle.
- Remember that even though you’re pre-qualified, you’re not necessarily approved. Getting an offer from Capital One does not mean you have the approval to buy the vehicle you want.
- You can only use your Capital One Auto Finance offer at specific dealerships. Not all dealers will accept your offer from Capital One. Additionally, you can’t use the offer to pay for a private party transaction.
- Auto Navigator will only show you vehicles close to you. As a result, your options are limited to what’s nearby.
- You could run into higher costs with Capital One. The company offers 72-month loans, which will cost you more over the long-term.
How Much Can You Borrow?
Using Capital One Auto, you can choose to apply for either a joint or a single loan.
This will help cover the costs of a new or used vehicle. With new car loans, you can borrow between $4,000 and $40,000 from Capital One to finance the vehicle.
If you decide to purchase a used car, the vehicle must be a 2006 or newer car, and it has to have fewer than 120,000 miles.
There are a few states in which the vehicle year has to be more recent than 2006.
What Is the APR?
When it comes to a Capital One car loan, the best rates you will find are 3.59% for vehicle purchases.
Of course, this percentage is reserved only for those who have excellent credit.
Remember that auto loan lenders set their credentials, but if you have a credit score above 720, you should get the best interest rates available.
If your credit is not in that range, then the chances are excellent that your credit score will be higher.
For example, if you’re in rebuilding mode for your credit, you’ll probably see a rate between 8.2% and 11.2%. If you’re not sure where you fall, use Capital One’s calculator to get a good idea of where you stand.
What Fees Does Capital One Charge?
There are a few fees when it comes to using Capital One Auto Finance as your lender.
First, Capital One charges a loan origination fee. Then, if you’re late on your payments, there are penalties and fees you’ll incur.
However, there are no penalties or charges for prepayment with your Capital One Auto loan.
If you can, select a lender that does not charge you anything for paying early. This can help offset or even eliminate interest costs if you can repay your loan early.
Is a Capital One Finance the Best Choice for You?
When it comes to finding the best auto loan option, Capital One Auto is hard to beat.
The company partners with more than 12,000 dealerships, so you shouldn’t have any trouble finding the vehicle you want. Plus, you can view personalized rates and payments when you pre-qualify.
However, remember that those numbers can change when you get to the dealership, and they pull your credit. Plus, you’ll have sales tax and registration fees to contend with.
On the other hand, if you need more flexibility, you may want to look for another loan provider.
This is especially true if you’re going to purchase your vehicle from an individual or from a dealership Capital One does not partner with. In that case, you’ll need to look for a different loan provider altogether.