Shopping for a new or used car has become a complicated experience. There are so many makes and models to choose from, so many dealers to purchase from, and a range of prices that makes it hard to see if whether or not you’re getting the best deal.
It can be overwhelming, to say the least.
That overwhelming feeling can lead so questionable financial decisions, such as spending more than you can afford, paying too much for the car you choose, and spending hundreds or thousands more in interest than necessary because you didn’t shop around for the best rate.
A Bank of America auto loan will provide 12 to 60 months with APRs starting at 2.89%. There is no origination fee, but Bank of America does not provide online pre-approval for new or used auto loans. You can, however, be pre-approved for a new dealer purchase by applying at a Bank of America branch.
Bank of America provides several APR discounts to its existing customers as well as Preferred Rewards Customers.
Current Bank of America personal checking account holders receive a 0.15% APR discount on their auto loans or auto refinances.
Bank of America also offers an APR discount of 0.25% to 0.50% on auto loans when you enroll in Preferred Rewards at the time of application. There are no fees to participate in Preferred Rewards, but you must have a Bank of America personal checking account and a 3-month average combined balance of $20,000 in your Bank of America accounts and/or Merrill Lynch investment accounts.
Car Buying Basics
The first thing you should do when considering a new or used car purchase is to take hard look at your budget. Consider all of your current debt payments – these should not exceed 50% of your income. Factor in the payment for your new car, and make sure that it will not stretch your budget too thin.
Then, shop around online for your best rate on an auto loan during a 30-day period. Doing all of your rate shopping within 30 days will result in minimal impact because all inquiries within a 30-day period are treated as a single inquiry.
Once you have secured financing and determined the budget for your vehicle, use a site like TrueCar or Kelly Blue Book to help you determine the best price for the car you want to buy by comparing what other people actually paid for the same model.
How To Apply
In order to apply for an auto loan from Bank of America, you must be at least 18 years of age (19 in Alabama or Nebraska). You should also be prepared with the following:
- Your address, phone number, email address, and Social Security number
- Employment and income verification
- Information on the vehicle you wish to purchase, such as the make, model, mileage, and the VIN
In most cases, you will receive approval or denial within 60 seconds of submitting your application with all of the required information online. However, some applicants will require a more detailed review. If you do not receive a decision within 60 seconds you will be contacted by email when the decision regarding your loan is ready.
In some cases, you could receive your funds in as little as 24 hours.
After you apply and are approved for the loan, you have 30 days from the date of the original loan request to use it without being required to re-apply.
The Fine Print
The 2.89% starting APR is only valid in certain states. Go here to check yours. The 2.89% APR assumes an excellent credit history and that you are purchasing a new vehicle from a dealership. Other types of purchases have the following minimum APRs:
- Dealer Used: 3.19%
- Private Party: 3.99%
- Refinance: 3.19%
- Lease Buyout: 3.19%
Your actual APR may be higher depending upon your creditworthiness, as well as the state in which you reside.
In order to finance a used vehicle through Bank of America, it must be not be older than 10 calendar years, have no more than 125,000 miles, and not be used for commercial purposes. It also cannot have a salvage title.
Bank of America does not finance auto purchases from independent dealers that carry several different brands of vehicles. The general exceptions to this rule are CarMax, Hertz Car Sales, Enterprise Car Sales and other found using this dealer locator tool.
In same cases, if the applicant is not deemed creditworthy enough, Bank of America will require a down payment or minimum loan to value ratio. These are determined on case-by-case basis and will not be known until you apply.
- Rates starting at 2.89%
- Terms of 12 to 60 months
- 60 second online approval, in some cases
- Funds in as little as 24 hours
- Will finance private party sales and lease buyouts
- No origination fee
- No prepayment penalties
- Up to 0.50% APR discount when you enroll in Preferred Rewards
- 15% discount for having a Bank of America Checking account
- Exact APR is not known until you apply
- Down payment may be required for certain applicants
- Will not finance purchases from independent dealers
- Used cars must be less than 10 years old and have less than 125,000 miles
- No online pre-approval
How It Stacks Up
If you want to explore your options, there are hundreds of lenders on LendingTree ready to compete for your business. LendingTree is the parent company of MagnifyMoney. You simply have to fill out a short online form and upon completion, you may see real interest rates and approval information instantly. While the online form is only a soft pull on your credit, meaning your score won’t be impacted, if you choose to move forward with a lender, lenders will likely do a hard pull on your credit. Note that since multiple hard pulls only count as one pull, it is smart to have all your hard pulls done at once.
LightStream can beat Bank of America’s starting APR and is far less complex. Its APRs start at 2.19%, it will finance vehicles up to $100,000, and it does allow you to receive pre-approval online before shopping. Its terms vary from 24 to 84 months, which allows for longer terms than Bank of America.
If you like great rates, but a more personalized experience than a big bank provides, then consider PenFed. PenFed is a credit union, but anyone can join with a one-time donation to an eligible charitable donation. It has APRs ranging from 1.49% to 3.84%, terms of 12 to 84 months, and will finance up to $100,000. It has no origination fee, but does not provide online pre approval.
Shop Around First
When purchasing a new or used car, the two most important factors are making sure you don’t spend more on a vehicle than you can afford, and getting the best rate possible. Before setting foot on a dealership, shop around for your best auto loan rate so you can have one aspect of car shopping taken care of up front.