I have read that online lenders may provide more competitive auto loan rates than banks or credit unions. Is that really true and who are some good companies to use?
The best rates and service frequently come from credit unions - they fold any profits back into the credit union. Many large employers, unions and branches of the armed services have connections with credit unions. If one of those isn't available, sites like this can help you see what the market rate is:
https://www.bankrate.com/auto/
It is somewhat true but not entirely beneficial. The reason is online banks don't have to rent physical buildings and hire employees to fill their locations. So, they pass some of their savings to you, resulting in lower competitive rates.
What’s the drawback of using them?
You may have bad customer service, tho. First of all, there is no in person conversation. People you talk to on the phone may not even locate in the US. What lenders do you have in mind?
I am asking you guys for recommendations. I have never done this before.
it would make sense since they just need a call centre, and don't have the expensive of a brick & mortar location.
However, I wouldn't expect customer service to be very good.
Same as those discount "online banks"
Credit unions usually give the best rates. Because they are non-profit.
