Auto loan shopping can expose thousands in hidden borrowing costs before you sign, and three competing quotes may be enough to change the deal.

You can spend an afternoon fighting for $750 off a car and then surrender several times that amount by accepting the first financing offer placed in front of you. That is the uncomfortable lesson in LendingTree’s auto-finance analysis.

The company reviewed more than 400,000 loan terms offered to users of its platform in July 2025. Across those offers, the average lowest APR was 13.45% and the average highest was 15.90%. For the average $26,566 financed over 67.5 months, the difference worked out to about $35 a month and $2,346 across the loan.

That is not a universal penalty for failing to shop. It is the average gap LendingTree calculated between the high and low offers in its dataset. Still, it is real money attached to the same basic purchase.

The practical point is that financing deserves its own negotiation. APR is especially useful because it reflects the interest rate plus certain loan fees. Comparing only the monthly payment can disguise a longer term, a larger amount financed or a more expensive loan.

You may enjoy this video about reasons people buy a Rolls-Royce:

You may also enjoy: Buying a Car? 10 Things You Must Do Before You Sign

The Biggest Auto Loan Shopping Savings

LendingTree’s credit-band results are a useful warning against assuming that a respectable credit score guarantees a competitive offer. Near-prime borrowers, defined in the study as those with scores from 620 to 659, had the widest average spread: 13.53% at the low end and 17.33% at the high end. On their average loan, choosing between those two ends represented $3,500.

Prime borrowers with scores between 660 and 719 saw a $3,066 difference. Super-prime borrowers at 720 or above still had $2,697 at stake. Subprime borrowers below 620 showed a smaller $1,424 spread, but their lowest average offer was already 20.16%, so the smaller gap should not be mistaken for cheaper borrowing.

This is why I would never judge a car deal solely by what happens to the sticker price. You are buying the vehicle and buying the money at the same time.

If the dealership can beat a bank or credit union, excellent. But the buy rate the dealer receives from a lender can differ from the contract rate offered to the customer, according to the Consumer Financial Protection Bureau. That makes a competing preapproval useful leverage rather than unnecessary paperwork.

You may also enjoy: Car Loans Could Get Brutally Expensive

Three Auto Loan Quotes Are Better Than One

How many buyers actually comparison-shop? The cleanest LendingTree survey figure is older than I would like. In a 2020 LendingTree survey of 2,075 Americans, 58% of people who financed a vehicle said they compared multiple offers; 42% said they did not.

That number should be treated as a historical benchmark, not a current 2026 measurement.

There is stronger guidance on how much shopping is enough. Research summarized by the National Bureau of Economic Research found that roughly three quotes are typically needed before an average borrower gets near the best rate available.

That is a wonderfully simple rule for a messy transaction: one quote gives you an offer; three begin to give you a market.

The fear that three applications will destroy a credit score is also overstated when the shopping is concentrated. The CFPB says multiple auto-loan credit inquiries made within roughly 14 to 45 days are generally treated as a single inquiry for scoring purposes.

You may also enjoy: Labor Day Car Deals: Buy Prepared, Not Hyped

How I Would Shop the Loan Before Shopping the Car

Start before the showroom. Check your credit, decide what you can comfortably borrow and obtain written offers from at least three sources if practical: a bank, a credit union or online lender, and then the dealership.

The Federal Trade Commission likewise recommends arranging financing terms in advance so the dealer’s proposal has something concrete to beat.

Then force every offer onto the same playing field. Use the same amount financed and the same term. Compare APR, finance charge and total of payments, not merely whether one salesperson can make the monthly number smaller.

A 72- or 84-month loan can make an expensive deal look friendly by spreading the pain over more calendar pages.

Ask for the vehicle’s out-the-door price before allowing the financing discussion to blur the numbers together. Price, trade value, cash down and loan terms are separate pieces of the transaction. Keeping them separate makes it much easier to see whether money gained in one column quietly disappeared in another.

You may also enjoy: Used Cars Under $20,000 Are Disappearing Fast

Let the Dealership Compete for the Loan

Captive lenders can sometimes offer subsidized rates that a bank cannot touch, and rejecting dealership financing on principle would be just as unwise as accepting it automatically.

The goal is not to avoid one type of lender. It is to make lenders compete for the privilege of financing your car.

The CFPB explains that APR includes the interest rate and certain loan fees. That makes it more useful than comparing advertised interest rates or monthly payments alone.

Manufacturer-backed financing may still win. Zero-percent or deeply subsidized promotional rates can save thousands of dollars, although buyers must compare that financing with any cash rebate they would surrender to receive it.

You may also enjoy: Deal of the Week: Mazda CX-90 PHEV at 0%

Why $2,346 Matters

The $2,346 in LendingTree’s study is memorable because it turns an abstract APR difference into something you can picture. It is a set of tires, several insurance payments or a sizable chunk of maintenance.

Saving $500 on the negotiated vehicle price feels tangible because it happens immediately at the dealership. Paying $35 too much every month is quieter. Across the average loan in the study, however, those smaller monthly differences added up to $2,346.

The best car negotiation may therefore happen before you ever discuss the car itself: make the people selling you the money compete first.