bank rates

Spring Car Loan Deal: 2.49% For 5 Years

Bank of America is offering some of the best deals on auto loans this spring, with rates starting as low as 2.49% APR on 60-month financing for new cars and trucks.

bank of america sign

That’s the rate for noncustomers. If you have a checking or savings account at the nation’s second-largest bank, and you’re enrolled in the bank’s Preferred Rewards program, you can get a quarter- to half-point discount, dropping the rate as low as 1.99% APR.

Both of those rates are considerably lower than the national average for 60-month new car loans – 4.28% APR, according to our latest survey of major lenders.

Borrow $25,000 for five years at 2.49%, and you’d pay $444 a month. Finance the same amount at the national average of 4.02%, and the monthly payment would jump to $464 a month.

The lower rate from Bank of America would save you $20 monthly, which adds up to $1,200 over the course of the loan.

The bank is offering great deals on used-car loans as well.

You can borrow money to buy preowned autos and trucks for as little as 2.74% APR over five years or 2.24% APR for account-holder customers enrolled in Preferred Rewards.

Most lenders charge much higher rates for used-car financing. In fact, the average for preowned auto loans is currently 5.11% APR. And that’s just for three years.

You can use this auto loan calculator to help figure what your monthly payment would be for a new car or truck.

It will also help you see how the term and down payment will affect your monthly payment.

Bank of America loans from $5,000 up to $100,000. But these loans are only available for vehicles sold through new-car dealers, and you’ll need good credit to qualify for the lowest interest rates. You have the best chance of qualifying if your FICO credit score is in the mid-700s and up.

You can apply online at Bank of America and receive a decision within minutes. There is no loan documentation fee.

How good is that?

Go to Bankrate’s database of the best auto loan rates to see what other lenders in your area are charging.

Keep in mind that it’s always a good idea to put at least 20% down on a new car, even if it isn’t required. Then the instant depreciation of driving a new car off the lot won’t put you upside down on your car loan – you won’t end up owing more than the car is worth.

Indeed, that’s part of the 20/4/10 rule – a very useful way to figure out how much you can really afford to spend on a new car or truck. It says you should put at least 20% down on a vehicle, finance it for no more than four years and not let your total monthly vehicle expense exceed 10% of your gross income.

Having an idea of how much you’d pay for a loan at a bank or credit union means you can bargain better with a car dealer’s finance manager.

Either the dealer has to beat the loan terms, or you can go with Bank of America for auto financing. Either way, you’ll know you’re getting a good deal.

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