Capital One auto loan rates tend to be best for medium and bad credit customers. Often other credit unions offer better loan terms on prime or near prime credit (670+). Those on a time crunch will find their auto loans and lending process exceptionally convenient.
Capital One is one of the nations largest auto lenders in existence. Currently it owns ~4.17% of the auto loan retail market, and is predominantly in the used-auto loan space.
While explicit average yield is hard to compare – according to Capital One’s 10K, their broader investment loan portfolio (which is 62% comprised of auto loans) yields 6.34%. This rate is not reflective of the total rates consumers pay (those rates may be further marked up by dealers).
As some cutoffs, internally Capital One considers a FICO score below 620 to be subprime. Across all auto loans here’s the breakout of FICO scores:
- Greater than 660: 52%
- 621-660: 17%
- 620 or below: 31%
Interestingly, these are current loan approval rates, but approval ratios go down as the credit scores become more challenged. Furthermore, the bank does have a reasonably high delinquency rate (cases were loans are unpaid for 30+ days). According to the latest 10-K
How do Capital One Auto Loans Compare:
Capital One’s largest competitive advantage is speed to approval, and loan flexibility. Dealerships (and Capital One corporate) are equipped to use internal tools to automatically approve a loan in a matter of seconds.
Furthermore, as the loan term changes (such as downpayment, length, etc) Capital One’s systems will automatically adjust the rates. So a 72 month loan with no money down is unlikely to receive the same rate as a 66 month loan with $5,000 down.
Furthermore, unlike credit unions – Capital One Auto Loans uses KBB lending figures as a basis for vehicle valuation. This value is lower than KBB retail that most west-coast credit unions use, so you’re more likely to be able to loan more using a conventional credit union.
While loans for subprime or mid-tier credit can be competitive, the rates for ultra-prime credit is not as competitive to credit unions. Their best offered rate is currently 2.49% – easily bested by other credit unions found on our calculator page here.
What Credit Tiers do they Serve:
Luckily Capital One is one of the few “Full-Spectrum” lenders – meaning they deal with all credit scores. The approval rates on lower-credit scores often requires higher levels of downpayment, or shortened term but we’ve observed many sub 600 credit score loans.
Is a Capital One Loan right for me:
In many cases – Capital One is a great place to get a “starting point” rate for mid-tier and subprime credit scores. For near-prime auto loans, its worth skipping a large for-profit lender and working through your local credit union.