Auto Loans
Top Companies in 2024
Capital One vs PenFed
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- Easy prequalification process
- Competitive interest rates
- Personalized financing options
- No application fee
- Bonus cash offers on select car models
- GAP Insurance & ADR
- Low APR rates
- Approval within 48 hours
- Competitive APR (annual percentage rate) as low as 2.09%
- Great deals with huge discounts when purchasing a car through its auto-buying service
- Offers for credit union members
- Auto loans can go up to 110% of the vehicle value
- Simple and straightforward online application
- Limited to approved dealerships
- Not available in all states
- Excludes certain vehicle types, ages, and brands
- Membership required to get a loan
- Social Security number required with initial application
- Best rates are available only for excellent credit scores
- You need to open a saving account before you can get a loan
Capital One, founded in 1994, is a major player in the auto loan industry, offering competitive financing options, flexible terms, and easy online application processes for new and used vehicles. They serve millions of customers across the United States and provide auto loans for new and used cars, as well as refinancing options. Through their Auto Navigator tool, customers can pre-qualify for financing without affecting their credit score and explore various loan options. Loan amounts start at $4,000, with terms spanning from 24 to 84 months. Additionally, they offer educational resources to guide customers through the loan process. Capital One has a mixed reputation in the industry but receives an A+ rating with the BBB. They recently settled a $16 million class-action lawsuit over improperly charged proxy fees. This doesn't involve their auto loan services. They receive mixed reviews, so consider all your options before using their services.
Pentagon Federal Credit Union (PenFed) was established in 1935 and is headquartered in McLean, Virginia. As the second-largest credit union in the United States, PenFed serves nearly three million members, offering a range of financial products, including auto loans for both purchasing and refinancing vehicles. PenFed's auto loan offerings feature competitive starting Annual Percentage Rates (APRs) ranging from 5.44% for new cars to 6.19% for used cars, with loans up to $150,000 and terms between 36 to 84 months. Unique to PenFed is their online car-buying service, which allows members to find vehicles and potentially receive discounts or rebates when financing through the credit union. Additionally, they offer pre-qualification with a soft credit check, making it easy for potential borrowers to explore their options without impacting their credit scores. Customer feedback highlights the ease of the online application process and the benefits of credit union membership. However, some users note that membership requires an initial deposit and that there are no discounts for automatic payments. Overall, PenFed's auto loans are well-regarded for their favorable rates and member-focused services, appealing particularly to those who leverage their car-buying platform.
- Loan Terms : Range between 24 and 84 months
- Minimum Accepted Credit Score : Undisclosed
- APR : Undisclosed (may be as low as 6.49%)
- BBB Rating : A+
- Loan Terms : 84 Months
- Minimum Accepted Credit Score : 550
- APR : 2.09%
- Wide range of loan terms
- Integrated online and mobile tools
- Accessible for lower-income borrowers
- Bonus cash offers on select car models
- GAP Insurance & ADR
- Competitive APR (annual percentage rate) as low as 0.99%
- Approval within 48 hours
- Great deals with huge discounts when purchasing a car through its auto-buying service
- Lease Buyout
- Loan Refinancing
- New Vehicle
- Private Party
- Used Vehicle
- Lease Buyout
- Loan Refinancing
- New Vehicle
- Private Party
- Used Vehicle
- Extended Warranty
- GAP Insurance
- Limited Warranty
- Mobile Application
- Online Account Management
- Return Policy
- Extended Warranty
- GAP Insurance
- Limited Warranty—Undisclosed
- Mobile Application
- Online Account Management
- Return Policy—Undisclosed
- Hard Credit Check
- Income
- Minimum Credit Score
- Pre-qualification With Soft Check
- Hard Credit Check
- Income—Undisclosed
- Minimum Credit Score
- Pre-qualification With Soft Check
- Documentation/Processing Fee
- Late Payment Fees
- Origination Fee
- Prepayment Penalties
- Title Transfer Fee
- Upfront or Application Fees
- Documentation/Processing Fee—Undisclosed
- Late Payment Fees—Undisclosed
- Origination Fee—Undisclosed
- Prepayment Penalties—Undisclosed
- Title Transfer Fee—Undisclosed
- Upfront or Application Fees—Undisclosed
- Automatic Payments
- Cash—Undisclosed
- Check
- Debit or Credit Cards
- In-Person Payments—Undisclosed
- Mail-In Payments
- Online Payments
- Phone Payments
- Automatic Payments
- Cash—Undisclosed
- Check—Undisclosed
- Debit or Credit Cards
- In-Person Payments—Undisclosed
- Mail-In Payments
- Online Payments
- Phone Payments
- Articles and Videos
- FAQs
- Help Guides
- Live Chat
- Phone
- Articles and Videos
- —Undisclosed
- FAQs—Undisclosed
- Help Guides—Undisclosed
- Live Chat
- Phone—Undisclosed
Capital One vs. PenFed
When comparing Capital One and PenFed for auto financing, both institutions stand out for their competitive offerings, yet they cater to distinct borrower needs. Capital One is a prominent bank offering a broad spectrum of financial products, including user-friendly auto loans, while PenFed is a credit union known for its military roots and a focus on member-driven value. Here's a breakdown of their services, pricing, and advantages to help borrowers decide.
Service range and offerings
Capital One provides extensive options for financing new and used cars, as well as refinancing. Their Auto Navigator tool allows users to pre-qualify without affecting their credit score, browse dealership inventories, and estimate loan terms. However, Capital One restricts loans to vehicles purchased through their partner dealerships and excludes certain types like motorcycles and commercial vehicles. They support loans ranging from $4,000 to $75,000, with flexible terms between 24 and 84 months.
In contrast, PenFed offers broader loan amounts—up to $150,000—for new, used, and refinance loans. Their partnership with TrueCar enhances the car-buying process by providing access to discounted vehicle prices. PenFed also includes features like extended warranties, GAP insurance, and debt protection plans. However, they have stricter eligibility criteria, such as financing only vehicles with fewer than 125,000 miles and requiring borrowers to become PenFed members by opening a $5 savings account.
Pricing and fees
Capital One does not charge application fees, and their interest rates vary depending on the borrower’s creditworthiness and the chosen term. For refinancing, borrowers may access competitive rates if they meet eligibility requirements. However, Capital One’s financing is limited to participating dealerships, which may restrict pricing flexibility.
PenFed’s rates start at 5.44% for new cars and 6.19% for used cars, with terms spanning 36 to 84 months. Their competitive APRs are available to those with strong credit, but higher rates may apply to borrowers with lower scores. Additionally, PenFed offers flexibility by financing up to 125% of a vehicle's value, which can cover additional costs like taxes or upgrades.
Advantages and disadvantages
Capital One shines with its user-friendly Auto Navigator tool, allowing borrowers to prequalify and adjust financing terms without impacting their credit score. Their vast dealership network and mobile app make the car-buying process straightforward. However, their dealership-only loan model limits flexibility, and they do not operate in Alaska or Hawaii.
PenFed’s strengths lie in its member-focused approach, offering tailored services like debt protection and extended warranties. Their car-buying service with TrueCar provides competitive pricing and additional savings. However, their membership requirement and stricter vehicle criteria may deter some borrowers.
Conclusion
Capital One is ideal for those seeking a seamless, tech-enabled loan experience with flexible terms, particularly for borrowers working with partner dealerships. On the other hand, PenFed is a better choice for borrowers looking for member-driven benefits, broader loan amounts, and additional protection plans. Both institutions offer valuable services, but their differences cater to distinct financial priorities and preferences.