Alternatives to Discover auto loans

Woman smiling and driving her new carImage: Woman smiling and driving her new car

In a Nutshell

Discover doesn’t currently offer auto loans. But if you’re looking for a car loan from a large bank, you still have options. We’ve rounded up three car loan alternatives for you to consider.
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You currently can’t get a car loan through Discover, but you may be able to get the financing you need with a different lender.

If you’d like to finance your car through a national auto loan provider, you have many to choose from. We’ve rounded up two possible alternatives to help you find the right auto loan lender for your needs.

Bank of America: Wide range of loan options

Why Bank of America could be a good alternative: Bank of America is a national financial institution that offers a range of financial services, including car loans. And if you’re an existing customer, you may qualify for an annual percentage rate discount.

This lender may be worth considering if you’re looking to finance a new or used car, refinance an auto loan, get help with a lease buyout or purchase your car from a private party. But you won’t be able to apply for prequalification beforehand to get a sense of what your loan terms might be. So if you decide to go with an auto loan at Bank of America, you’ll have to formally apply, which will result in a hard credit pull.

Here are some more details about Bank of America auto loans.

  • Dealership limitations — If you’re looking to buy a new or used car from a dealer, you’re limited to shopping at Ford, General Motors, Chrysler, Honda and a few other franchises. Or you can buy from approved independent dealers like CarMax, Enterprise Car Sales or Carvana.
  • Discounts for eligible Bank of America customers — If you’re a Bank of America customer enrolled in Preferred Rewards, you may be eligible for an APR discount anywhere from 0.25% to 0.50%.
  • Available nationwide — Loans are available in all 50 states and the District of Columbia.
  • No prequalification option — Bank of America doesn’t offer the option to apply for prequalification before formally applying, but you’ll get a decision in minutes with a rate that’s locked in for 30 days.
  • Limitations on vehicle age and mileage — Vehicles older than 10 years or with more than 125,000 miles aren’t eligible for Bank of America financing.

Read our full review of Bank of America auto loans for more.

Capital One Auto Finance: Prequalify without affecting your credit

Why Capital One Auto Finance could be a good alternative: Capital One Auto Finance, which is part of Capital One, is similar to Discover in that it offers a variety of financial services. One standout feature of Capital One auto loans is the option to apply for prequalification for a car loan, which doesn’t affect your credit scores. Prequalification doesn’t necessarily mean you’re approved for the auto loan, but it can show you what your payments might look like if you’re approved for a loan. If you submit a formal application, which may include a hard credit check, and you’re approved, your terms might differ.

Here’s some more info on Capital One Auto Finance.

  • Basic loan options — Capital One offers only new- and used-car loans and refinancing — you won’t be able to get a lease buyout loan or purchase a vehicle from a private party.
  • Shop for cars online — You can easily choose the car you want to buy, and you can even negotiate the price using Capital One’s online Auto Navigator if you’re preapproved.
  • Limited dealer network — You’ll have to buy your vehicle from one of Capital One’s partner dealers if you want to apply for an auto loan.
  • Monthly income requirements — To qualify for an auto loan with Capital One Auto Finance, you’ll have to meet monthly income requirements, which will vary based on your credit history.
  • Certain vehicles are ineligible — Capital One finances only new and used cars, light trucks, minivans and SUVs that have an established resale value. Vehicles must be a model year that’s 10 years old or newer and have fewer than 120,000 miles. In some cases, Capital One may finance an older vehicle with fewer than 150,000 miles. And if you’re looking to refinance an Oldsmobile, Daewoo, Saab, Suzuki or Isuzu, you’ll be out of luck.

Read our full review of Capital One Auto Finance to see if it may work for you.

Depending on your credit, budget and needs, one of these lenders could be an alternative to Discover, which doesn’t offer auto loans. Whether you’re looking for a lender that offers auto loans geared toward people with little to no credit, the option to apply for prequalification or a wide variety of car loan options, you can find a lender that works for you.

LightStream: Competitive interest rates

Why LightStream could be a good alternative: LightStream, the consumer lending branch of Truist, offers several different types of vehicle loans and competitive rates. The very best rates are limited to loan amounts in the $10,000 to $24,999 range with a 36-month loan term, but if you’ve got strong credit, you may be able to qualify for other good rates and terms.

Here are some more details about LightStream auto loans.

  • Wide range of loans: LightStream offers several types of auto loans, including loans for new cars, refinancing, lease buyouts, and even motorcycle and RV loans.
  • Rate beat program: On top of competitive interest rates, LightStream also says it will beat competitors’ rates by 0.10 of a percentage point — if the loan meets some specific conditions. 
  • Offers both secured and unsecured auto loans: If you’ve got strong credit, you may be able to qualify for an unsecured loan with LightStream, which means your car won’t be used for collateral.
  • Variety of loan terms: LightStream loans range from $5,000 to $100,000, with repayment lengths of 36 to 72 months, depending on the amount of your loan.
  • No prequalification option: LightStream will do a hard pull on your credit when you apply for a loan, which could affect your credit scores.

Read our full review of LightStream auto loans to learn more.

About the author: Sarah Archambault is a freelance writer based in New England. She enjoys learning new ways to spend money wisely and helping others figure out how to make smart financial decisions. Sarah is a graduate of the Newhouse… Read more.