Find the Best Car Loans in Phoenix, AZ

How to get an auto loan in Phoenix

Car loans are easy to find in Phoenix through banks, credit unions, car dealerships and online lenders. Your eligibility and financing terms are determined by several factors, including your credit score, your income and the cost of the vehicle you are purchasing.

Getting pre-approved for a loan has multiple benefits, including:

• Setting a budget
• Understanding what terms lenders are willing to offer
• Creating a better negotiating position with the dealer
• Saving time and hassle at the dealership

Comparing car loans in Phoenix

Lenders primarily base the rates and terms of your car loan on your credit score. The average credit score for Phoenix residents purchasing a new vehicle is around 714, and the average score for people buying a used vehicle is 655. Phoenix residents with excellent credit typically receive loans with an annual percentage rate (APR) between 2 and 3 percent, while those with poor credit receive loans with APRs between 10 and 18 percent.

Lenders may also require specific documentation, including:

• Proof of income: Lenders generally have you prove your income through pay stubs or W-2 tax forms.
• Proof of insurance: Before taking out a loan for an auto purchase, many lenders require you to have insurance that covers the vehicle.
• Proof of identity: This is often done by providing a signed photo ID.

While the APR affects the total cost of your loan, pay attention to loan terms as well. Loans with longer terms have a lower monthly payment but cost more overall. Typical car loan terms in Phoenix range from 24 months to 72 months or longer.

Borrowers in Phoenix with poor credit may need to put down a more substantial down payment. Paying more upfront reduces the total amount of your loan, resulting in lower monthly payments or a reduced loan term.

Buying a car comes with additional costs, so check for fees when comparing loans and make sure you leave enough money for:

• Sales tax
• Loan fees, including origination fees and documentation fees
• Dealer fees
• Title and registration fees
• Insurance

Take advantage of the loan calculators offered by many online banks and lenders to work out your monthly payment. Always shop around to find the best car loan rate at comfortable terms. Good research leads to a good buying experience.