Capital One Auto Finance: 2018 Review


Good for: Borrowers who want to pre-qualify for auto financing from a well-known bank and to complete the purchase process at a dealership.

Capital One, known for a wide range of banking products and credit cards, provides financing for new and used car purchases or will refinance your current auto loan.

Capital One Auto Finance is a good fit for those who:

  • Want to check rates with no impact on their credit score
  • Prefer financing from a well-known lender with an established network of car dealerships
  • Use their pre-qualified offer to simplify the dealership buying experience by setting a baseline financing rate for the dealership to meet or beat

*Annual percentage rate is used to evaluate the true cost of borrowing money and includes the interest rate. **For excellent credit

Capital One Auto Finance review details

Capital One Auto Finance does not require a hard credit inquiry upfront. This means you can pre-qualify for financing for a new or used car purchase from a dealer, or to refinance your auto loan, with no impact on your credit score. This makes Capital One Auto Finance a good option for rate shoppers comparing auto loan offers.

For purchase financing, Capital One’s Auto Navigator tool shows pre-qualified offer terms and lets you search for the car you want at participating dealerships. After you pre-qualify, you bring your offer to one of the dealerships and complete a credit application, which results in one or more hard credit inquiries.

Pre-qualification does not guarantee that you’ll get financing, and your final terms will depend on the hard credit pull done at the dealership. You can use the Capital One financing or accept another offer from the dealer.

The pre-qualification process and Auto Navigator help car buyers by setting a baseline interest rate before the trip to the dealership. This puts you ahead of those who arrive at the car lot with little idea of their credit score or what interest rate they can get. It also lets you estimate your monthly car payment and see what fits your budget before you head to the dealership.

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For auto refinance loans, pre-qualification decisions are typically returned within 24 hours; your loan offer will show a new rate, term and monthly payment. If you select the offer, you’ll submit a complete credit application. Again, a hard credit inquiry is required and your final terms could change.

CAR FINANCING RATES

The best rates offered by Capital One Auto Finance, 3.89% for purchases and 3.39% for refinance loans, are likely only available if you have credit in the top end of the excellent range. Lenders can set their own requirements, but excellent credit is generally considered 720 or better, while 690 to 719 is generally considered good.

If your credit is less than top-tier, your interest rate will be higher, which means your monthly payment will be more and, over time, you’ll pay more interest. For instance, shoppers who are “rebuilding” their credit can expect purchase financing rates starting at 8.2% for new cars and 11.2% for used cars, according to Capital One’s car payment calculator. If you know your credit score, you can get an idea of the interest rate you might qualify for.

APPLYING TO CAPITAL ONE

  • Pre-qualified offers are good for 30 days
  • A hard inquiry is required at the dealership, or upon selecting your refinance offer
  • Final APR depends on credit application and vehicle
  • No application fee; may charge late fees
  • Co-applicants allowed

RESTRICTIONS

  • Maximum vehicle mileage (purchase): 120,000 miles
  • Maximum vehicle age (purchase): 10 or 12 years, depending on state
  • Maximum vehicle age (refinance): 7 years
  • Loan terms: 24 to 84 months for purchases; for refinance loans, you can extend your current loan term up to 12 months (NerdWallet doesn’t recommend loans over 60 months)
  • Excluded makes/models: Includes Oldsmobile, Daewoo, Saab, Suzuki and Isuzu vehicles
  • Available in all states except Alaska and Hawaii

How Capital One Auto Finance compares

Many online lenders provide financing without much restriction on where the loan is used. With Capital One purchase financing, you have to use Auto Navigator and shop at a participating dealership.

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Furthermore, the credit application — which finalizes the financing offer — is filled out at the dealership, not online. Assuming the information you initially provided is complete and accurate, there shouldn’t be any big changes or unpleasant surprises at the dealership. However, the final rate or term could change and you’d have to make a decision on the spot about whether to accept the new financing terms.

The table below shows how Capital One compares to other auto lenders. Some companies provide loans directly while others may shop for loans for you from a network of lender partners.

*For excellent credit **Max varies by state ***With autopay

More from Capital One

Capital One Auto Navigator works with over 12,000 participating dealerships. After you pre-qualify, you’ll see personalized loan rates and can compare payments and save customized terms on the cars you like.

Keep in mind that the vehicle prices listed on participating dealer sites are the “asking” price and can probably be negotiated. Before you agree to a sale price, ask the dealer for an “out the door” price that lists all dealer fees. These fees are not set or controlled by Capital One. Typically, dealers will charge a documentation fee, sales tax and registration fees.

Capital One’s website includes details on its auto financing and refinancing products, a loan calculator and a blog featuring credit score and car-buying information. Capital One also offers a wide variety of credit cards, banking accounts and investing products.

Shopping for an auto loan


Methodology

To review Capital One, NerdWallet collected data points from the lender and the lender’s website, reviewed the online application process with sample data and compared the lender with others that seek the same customer or offer a similar product.



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