2013 Auto Loan & Lease Report

by Sonia Garrison


auto-loan-lease Despite the fact that Americans are driving 7.2% less than they did before the recession, we’re still spending a staggering amount on our vehicles. The average household allocates 6.2% of its total annual spending, or $3,200 per year, toward vehicle purchases, according to the U.S. Bureau of Labor Statistics.

The above figure does not even include the $223 that the average household spends on vehicle finance charges each year or the $6,600 that we spend on gas, repairs, and other vehicle expenses.

Given the significant amounts of money that we pour into our cars on an annual basis, the intense CFPB scrutiny that’s currently being placed on the auto industry due to allegedly discriminatory pricing practices, and the fact that 2014 is expected to be the biggest year for auto sales since the start of the Great Recession, WalletHub decided to give the auto loan and lease market a closer look in order to help consumers save money on their impending purchases.

More specifically, we analyzed auto financing offers from 137 lenders – including 27 community/small banks, 47 regional banks, 10 national banks, 32 credit unions, and 21 different car manufacturers – in search of useful benchmarks and revealing trends.

Key Findings

Banks and Credit Union Financing

  • Credit unions provide 47% lower interest rates for new car loans and 49% lower interest rates for used car loans than traditional banks.
  • Community/small banks charge around 60% higher interest rates than national banks and credit unions.
  • While traditional banks generally cap their loans at 72 months, credit unions offer repayment terms of up to 96 months for new models and 84 months for older ones.
  • You’ll pay 15% less interest on a new car than a used one these days – the highest spread recorded in the last 2 years. In other words, if you’ve ever wished to buy new, now is the time to push the deal through!
  • Interest rates on bank car loans have fallen by around 10% since Q1 2012 and appear to have stabilized in recent months.

Dealership Financing

  • Car manufacturers charge 42% lower interest rates on average than traditional banks and 10% higher than credit unions.
  • However, buyers should be aware that car dealers often inflate the “lowest available interest rate” in order to make more money on the back end of the transaction. The average dealer markup in 2009, according to a recent study published by The Center for Responsible Lending, was 1.01 percentage points for new car loans and 2.91 percentage points for used car loans. The practice cost consumers approximately $25.8 billion in additional interest. Buyers should therefore always verify the interest rate on the final set of loan documents they sign and never take advertisements at their word!
  • Car manufacturers charge 43% lower interest rates for a 36-month loan than for their average lease program.
  • If you plan on keeping your car for 3 years, 81% of car manufacturers offer a better deal if you finance rather than lease. Based on this data, it is clear there is no universal rule for when to lease vs. buy, and consumers should always make sure to crunch the numbers before making a purchase.

Car Financing Summary table Q4 2013

New Car APR Used Car APR
Community and Small Banks 4.53% 5.51%
Regional Banks 4.60% 5.28%
National Banks 3.52% 4.22%
Credit Unions 2.24% 2.54%
Car Manufacturers - Loan 2.46% n/a
Car Manufacturers - Lease 4.35% n/a

Note: All financing data based on 36-mos term

New and Used Car Loan Interest Rates


Note: All financing data based on 36-mos term


Banks Car Loan APRs 2013

Q1 2013
(vs. last yr)
Q2 2013
(vs. last yr)
Q3 2013
(vs. last yr)
Q4 2013
(vs. last yr)
Q4 vs. Q3
New cars loans APR 4.638%(-8.50%) 4.514%(-8.58%) 4.441%(-8.68%) 4.450%(-7.87%) 0.20%
Used cars loans APR 5.274%(-6.96%) 5.172%(-7.58%) 5.082%(-8.10%) 5.181%(-5.90%) 1.95%

Note: All financing data based on 36-mos term

New and Used Car Loan Historical Bank Interest Rates

Note: All financing data is based on a 36-month term.

Dealership Financing

Car manufacturer Dealership APR Q4 2013 Lease APR (inferred interest rate) Q4 2013
Honda 0.90% 6.25%
Toyota 3.38% 4.42%
Volkswagen 3.90% 2.51%
Chevrolet 2.90% 1.15%
BMW 2.99% 4.67%
Nissan 0.00% 2.04%
Hyundai 0.00% 4.73%
Kia 0.90% 6.01%
Chrysler 3.64% 4.80%
Mazda 0.90% 3.23%
Buick 1.90% 3.49%
Acura 0.90% 5.08%
Subaru 0.00% 2.50%
Ford 4.90% 2.38%
Dodge 3.90% 6.78%
Audi 1.90% 4.34%
Fiat 4.90% 6.08%
Lexus 2.90% 2.17%
Scion 3.95% 7.59%
Mercedes 3.90% 5.43%
Infiniti 2.99% 5.64%
Average 2.46% 4.35%

Note: All financing data is based on a 36-month term. The APRs presented for the financing and lease programs of the car manufactures are only informative. The actual values that one can obtain are based on various factors, like credit worthiness, income, promotional programs and, believe it or not, negotiation skills. Make sure to always check upfront with a dealer about the availability of any discounts for particular groups (i.e. USAA members) that you might qualify for as well as whether any other costs and/or restrictions may be imposed, especially in the case of lease contracts.

Main Car Manufaturers Financing vs. Lease Offers

Note: All financing data is based on a 36-month term.



  • We reviewed auto financing offers from 137 lenders for this report, including 27 Community Banks (<$1 billion in total deposit volume) and Small Banks ($1B - $10B in total deposit volume), 47 Regional Banks $10B – $100B in total deposit volume), 10 National Banks (those with a National footprint),32 Credit Unions, and 21 Car Manufacturers.
  • For comparison purposes, we used 36 months as the repayment term for both financing and lease programs.
  • The following assumptions were applied for bank-originated loans: $20,000 loan - new cars,$10,000 loan - used cars, 80% LTV, excellent credit score (720+).
  • In order to calculate the “Lease APR” we used the following methodology:
    • The difference between the price of the car in the beginning and the end of the lease represents the amount that someone “borrows” when they lease a car.
    • By multiplying the monthly payments with the term of the lease we obtain the total amount paid for that contract.
    • The difference between the total amount of payments on the lease contract and the amount “borrowed” represents the total amount of interest, in dollars, that was paid during that period.
  • Car manufacturer loan and lease data was obtained from manufacturer websites, where available, or were contacted directly. The following assumptions were applied: excellent credit score (720+) and an annual expected mileage for the lease program of 15,000.
    • For each car manufacturer, APR data was requested for the most popular model according to an AutoNews study published in Q4 of 2013 – utilizing the most basic equipment options available.
    • For the price of the car we used the Manufacturer Suggested Retail Price “MSRP” minus any applicable dealer discount. The list of cars is the following:
Car Manufacturer Car Model Price of the Car
Honda 2014 Civic Coupe LX
2014 Civic Coupe LX
Toyota 2014 Toyota Camry L
2014 Toyota Camry L
Volkswagen 2014 VW Jetta S
2014 VW Jetta S
Chevrolet 2014 Chevy Cruze LS
2014 Chevy Cruze LS
BMW 2014 BMW 320i Sedan
2014 BMW 320i Sedan
Nissan 2014 Nissan Altima 4dr Sedan I4 2.5 S
2014 Nissan Altima 4dr Sedan I4 2.5 S
Hyundai 2014 Hyundai Sonata SE 2.0T
2014 Hyundai Sonata SE 2.0T
Kia 2014 Kia Soul Base (A6) 4dr H
2014 Kia Soul Base (A6) 4dr H
Chrysler 2014 Chrysler 200
2014 Chrysler 200
Mazda 2014 Mazda 3 Sedan
2014 Mazda 3 Sedan
Buick 2014 Buick LaCrosse
2014 Buick LaCrosse
Acura 2014 Acura TL
2014 Acura TL
Subaru 2014 Subaru Outback
2014 Subaru Outback
Ford 2014 Ford Fusion
2014 Ford Fusion
Dodge 2014 Dodge Charger
2014 Dodge Charger
Audi 2014 Audi A4
2014 Audi A4
Fiat 2014 Fiat 500
2014 Fiat 500
Lexus 2014 Lexus ES 300
2014 Lexus ES 300
Scion 2014 Scion tC
2014 Scion tC
Mercedes 2014 Mercedes-Benz C-Class Sedan
2014 Mercedes-Benz C-Class Sedan
Infiniti 2013 Infiniti G37
2013 Infiniti G37

UPDATE 3/04/14: While the data in this report is accurate and has not changed, we reported the following key finding in our original report in error "Car manufacturers charge 7% lower interest rates, on average, than banks and credit unions." We have since updated our report to reflect the following correction, "Car manufacturers charge 42% lower interest rates on average than traditional banks and 10% higher than credit unions."


Sonia Garrison is Research Manager at Evolution Finance. Previously she worked as a Senior Researcher at the Center for Responsible Lending. Sonia has more than 20 years experience…
131 Wallet Points