Wednesday, July 30, 2014
Inquirer Daily News

State Farm Bank auto loan costs just 2.44%

State Farm Bank's auto rates aren't just competitive. They're well below average.

State Farm Bank auto loan costs just 2.44%

State Farm also has an affiliated bank that offers vehicle loans.
State Farm also has an affiliated bank that offers vehicle loans. iStockphoto

You may think of car insurance when you think of State Farm, especially since it's the country's largest auto insurance provider. But the company also has an affiliated bank that offers vehicle loans.

And State Farm Bank's auto rates aren't just competitive. They're well below average.

It offers four-year loans for new cars and trucks for as little as 2.44% APR, compared with the average 48-month, new-car loan, which costs 4.05%, according to our national latest weekly survey of major lenders.

This offer is available to borrowers throughout the country, and you don't have to be an insurance customer to get an auto loan.

More coverage
 
Car insurance myths busted

It's worth a look, considering you can save hundreds of dollars in interest payments.

If you borrow $15,000 at the national average rate and finance it for four years, you'd pay $1,273 in interest over the life of the loan. With the State Farm rate, your total interest payments would be $759, or $514 in savings.

Search our database of the best auto loan rates from scores of other lenders in your area to see if you can find a better deal.

Then, you can use our auto loan calculator to help you find what the monthly payment would be.

Instead of going to a bank branch, you have to contact a State Farm agent to apply for an auto loan. The bank website lets you plug in your ZIP code to find an agent nearby.

There is no application or origination fee. You will need to have excellent credit to qualify for the lowest rates, and you have to borrow at least $5,000.

There is a $100 prepayment penalty if the loan is paid in full within 12 months.

If you are planning to buy a new car soon, lining up a low rate auto loan from State Farm before visiting the dealership gives you more bargaining power. When it comes time to negotiate the sales price and auto financing, you won't have to depend on the dealer manager for a loan.

For more tips on buying a new vehicle, read our 5 simple steps to the best deal on a new car or truck. Then you can shop with confidence.

 


This article originally appeared on Interest.com.

 

About this blog