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Buying a car is one of the biggest purchases of your life, both literally and figuratively. And with a big purchase comes the question: How will I afford it?
Fortunately, car loans — also known as auto loans — could have you driving off in a new ride sooner than you thought. Here’s what you need to know before heading to the dealership.
A car is bound to be one of the most expensive purchases of your life, especially if it’s a new car. As a result, it’s difficult to cover the whole thing in cash. A car loan makes up the difference. That means if you buy a $30,000 car but only have $5,000 saved for the down payment, you’d apply for an auto loan for the remaining $25,000.
The most common places are banks, credit unions, AAA, online lenders, and even the dealership itself. Citizens Bank does not offer car loans, but does have partnerships with a variety of dealers under the brand name Citizens One.
Still, there are other, non-traditional lending options to finance a car purchase, like a personal loan or home equity options.
Terms vary by lender. Generally speaking, interest rates tend to be between 4% and 6%. Your interest rate will depend on your credit score, size of down payment, length of your loan, and — again — the lender.
You can choose the length of the loan that works for you. For example, your lender could offer a 24-month loan or one for 48 months. A shorter loan means two things: 1. A larger monthly payment, and 2. Less interest paid over the life of the loan. The opposite is true for longer loans.
The zip code you entered is served by Citizens One, the brand name for Citizens Bank's lending business outside of our 11‑state branch footprint. Under the Citizens One brand we offer Auto Loans, Credit Cards, Mortgages, Personal Loans and Student Loans. To learn more, please visit: