Cars are a necessity in Omaha, where close to 100 percent of residents commute by personal vehicles. A car is a substantial financial investment that usually requires a loan. Our partners at ConsumerAffairs researched the best car loans in Omaha to help you get the best rate and know what to expect when you start shopping.
Car loans are available at banks, credit unions, online lenders and Omaha auto dealerships. Some people prefer online lenders, while others want to work with local Omaha banks.
To apply for an auto loan, a potential lender generally requires:
Proof of identity (photo ID)
Proof of residence (utility bill)
Proof of income (pay stubs or bank statements)
Proof of insurance
Financial information on current credit accounts, including other debt
Qualifying for a car loan in Omaha
The main factor that influences whether you get approved for an auto loan is your credit score. It’s helpful to know your credit score before you begin applying for loans.
Your credit score is also the primary factor in the interest rate and annual percentage rate (APR) lenders offer. While APR and interest rate are similar, they not that same. The interest rate is the cost to borrow the principal amount each year, and APR is the interest amount plus other fees and costs of your loan. Your APR and term length determine your total loan cost.
APRs for car loans in Omaha range from 3 to 15 percent. Here are some general guidelines that lenders follow for average auto loan interest rates, according to Experian:
Credit score range
Average APR (new car)
Average APR (used car)
781 - 850
661 - 780
501 - 600
300 - 500
Other factors that affect your interest rate:
Income: Your potential lender uses your yearly income to calculate your debt-to-income ratio, which tells the lender how much income you spend on rent, utilities and other loans. This helps the lender assess its risk and whether you can afford a car payment. While every lender is different, most prefer a borrower’s debt-to-income ratio to be 40 percent or less.
Loan term: A typical car loan in Omaha is three to six years, though some lenders offer shorter or longer loan terms. The longer your loan term, the lower your monthly payments are. The overall loan cost is less on a shorter loan because you’ll pay less interest, however. A good recommendation for loan terms is 60 months for new cars and 36 months for used vehicles.
Type of vehicle: Vehicles lose their value quickly, so the older a car is, the higher the interest rate. If you don’t want to buy new, cars that are one to two years old usually have the best rates.
Additional costs to buying a car in Omaha
Besides the purchase price of your car, there are other expenses in the loan and car purchasing process. When you buy a car, you may make a down payment to lower the amount of your loan. A down payment should be at least 20 percent of the purchase price for new cars and 10 percent for used cars. Other additional expenses to account for when buying a car are:
Getting pre-approved for an auto loan before shopping is the best way to make the process easier. When you get pre-approved, the lender often does a hard credit pull that temporarily lowers your credit score. If you’re considering a few lenders that offer pre-approval, make sure you apply within 14 days. Multiple hard credit inquiries only count as one if completed within a short period.
When you’re pre-approved, you know the rate and the amount you can borrow, which lets you set a budget. Getting pre-approved also familiarizes you with the auto loan process. Knowledge is power when buying a car. Being pre-approved may also help you receive a better APR offer from the dealership or a lower cost on the car by being a cash buyer.
Apply with multiple lenders and compare offers to create competition to get your business. Lenders weigh factors on your credit report differently, and various lenders may make substantially different loan offers. The U.S. Consumer Finance Protection Bureau also has information on comparing car loans.
Getting a car loan with bad credit in Omaha
If you have subprime credit, typically a score of 600 or lower, you may have trouble getting approved for a car loan by traditional lenders in Omaha. Look for lenders that offer auto loans to people with lower credit scores. Keep in mind that loans from these lenders usually have higher interest rates and less favorable terms.
A more substantial down payment makes you more likely to qualify for a car loan, so consider saving money to pay more upfront if possible. If you’re improving your credit score, you may be able to refinance your auto loan in six to 12 months to get a better interest rate and a lower monthly payment. The CFPB also has information about what to expect when shopping for car loans.
LightStream is a national online consumer lending division of SunTrust Bank. The company offers loans for $5,000 to $100,000, and funds can be made available the same day. The company offers a $100 guarantee that it provides the best loan experience. Omaha customers love how simple it is to apply and how quickly they received funding.
Auto Approve is a car loan refinancing company that helps Omaha customers lower their interest rates and monthly payments. Customers can apply on the company’s website and speak to a consultant to discuss their best options. The company receives positive reviews from Omaha car buyers for its easy application process and hardworking consultants.
LendingTree is an online loan broker that allows customers to compare car loan offers from more than 350 lenders, banks and credit partners nationwide. Omaha customers fill out a single application and receive multiple offers to compare. Omaha customers say the helpful staff does a great job explaining the loan process.
myAutoloan.com is an online marketplace that allows Omaha customers to apply for a car loan and receive up to four offers, with funding available as soon as 24 hours after acceptance. The company also works with lenders that specialize in low credit scores. Car buyers in Omaha say they’re delighted with the company’s results.
Capital One offers a wide range of auto loan options for used or new vehicles. Customers can estimate their monthly car payments, get pre-qualified for a loan or refinance their car loan on the company’s website. Omaha customers appreciate Capital One’s online tools, but the company receives mixed reviews on its customer service.