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      August 4, 2020

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CARCHEX vs OneMain Financial

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To help you find the Best Auto Loans, TopConsumerReviews.com provides you with an in-depth comparison of CARCHEX and OneMain Financial.

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Where can you get the best auto loans? You're right if you suspect that the answer to that question is "not necessarily at the dealership".

You might initially be lured in by a dealership's attractive 0% financing offers - but unless you've got extremely good credit, you're not going to qualify. And, in the excitement of getting your new (or new-to-you) car, you could wind up with interest rates on your car loan that are even higher than what you'd get elsewhere.

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2020

Auto Loan Reviews

3.5 stars
CARCHEX

CARCHEX

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BBB Rating:

A+, accredited since 2009

You've probably heard of CARCHEX as a source of vehicle protection plans, inspections, and even roadside assistance coverage. They also offer auto loans as a referral service, taking your application and passing it along to different lenders to give you financing.

Exceptional reputation

CARCHEX overall has an exceptional reputation, shown by their "A+" rating and more than 10 years of accreditation with the Better Business Bureau. They bring a strong service to compete for your business if you're looking to refinance your existing auto loan.

Some confusion

You may get a little confused when starting on their Auto Finance page. It appears that both new loans and refinance loans are available with CARCHEX in fact, they quote low rates for New Autos, Used Autos, and Refinance loans. Further down the page, they list some good points for obtaining a loan for a new or used car before you buy.

Refinance loans only

However, their loan application deals strictly with refinance loans. When filling out the online application, you need to provide the VIN number for the car you're interested in which you wouldn't have if you were seeking a pre-approval. Also, they ask you to Select your Loan Type on the application, but they only give you one option refinancing your current vehicle. In fact, they even refer to their online loan form as their "auto refi application".

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Nearly 100 lenders

Putting that aside, how does CARCHEX stack up when it comes to refinancing your auto loan? They actually do pretty well. After submitting your loan application, CARCHEX scours their database of nearly 100 lenders to find the best programs for your specific criteria. Within minutes, you'll be contacted with quotes from up to 4 different lenders. And if you have bad credit, it's not a problem they have both prime and subprime lenders in their network.

No obligation

Once you've received your loan offers, you'll need to compare the offers yourself and follow up with the lenders and loan offers that you like the best. The CARCHEX service is free, and you're not under any obligation to pursue any of the loan offers if you don't like them.

Can't predict your loan rate

What type of fees and loan rates can you expect? Since CARCHEX deals with so many different lenders, and accepts applications from all different credit types, it's impossible for them to give an expected rate until you apply yourself. At the time of our review, they posted rates as low as 1/99% for new, used, and refinance loans, but these rates may only apply to select borrowers with the highest of credit ratings.

Who are the lenders?

We tried to find a list of the lenders that CARCHEX works with, but came up empty. In this age of increasing identity theft, many customers hesitate to put their personal information out into the void (especially their SSN) without knowing anything about where it's going. We wish CARCHEX was a little more transparent about who they're working with.

Wealth of information

You will find a wealth of information on the site about how auto refinancing works, whether it affects your credit rating, and many other related topics. These are good resources to browse whether you decide to obtain a loan through CARCHEX or not.

Good choice for refinance-only loans

CARCHEX provides a strong peer-to-peer lending platform for auto refinance loans. We do wish they were a little more forthcoming on who their lending partners are. Also, if you're looking for a new or used car loan, you won't find it here. Still, if you're just looking to refinancing an existing car loan, CARCHEX has a solid reputation and provides a good service, for free.

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3 stars
OneMain Financial

ONEMAIN FINANCIAL

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BBB Rating:

A+, accredited since 1985

OneMain Financial is a lender with a very long history - more than 100 years! They have in-person branches in 1,500+ locations throughout the country offering personalized service.

Loans from $1,500 to $20,000

When it comes to financing, this company provides personal loans that can be used for whatever purpose you choose - including the purchase of a vehicle. Their loan amounts range from $1,500 to $20,000, so you might be out of luck if you're hoping for a brand-new Porsche or Tesla and need an auto loan to do it.

No risk

It's easy to see if you qualify to borrow money from OneMain. Start by entering the desired loan amount and click on "Check For Offers". On the next page, you'll fill out the usual details: name, contact information and address, last four digits of your SSN (to verify your identity), monthly net income and source, and if you currently own a vehicle. Checking for a pre-qualified offer won't affect your credit score, so there's no risk to seeing what OneMain has available for your auto loan.

Less convenient

Although we didn't find this information stated explicitly in the site's fine print, OneMain only provides auto loans in 44 states (according to the Better Business Bureau). Unfortunately, that may mean it's trial-and-error for you to determine if you live in one of the 6 states that isn't served by this company. You also have to go to a OneMain branch in person, if you decide to accept their loan offer. That makes this service a lot less convenient when compared with online-only auto loan providers.

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Where do you live?

Where you live may also impact the size of the auto loan you qualify for. You've got minimum loan sizes ranging from $2,100 to $3,100 in Alabama, California, Georgia, Ohio and Virginia. On the other end of the spectrum, unsecured loans have limits ranging from $7,500 to $14,000 in Florida, Iowa, Maine, Mississippi, North Carolina, New York, Texas and West Virginia.

Collateral needed for large loans

For the largest loans, you'll be required to provide collateral to secure them. OneMain will put a first lien on a car you already own: it has to be no more than 10 years old, meet certain value requirements, be titled in your name and have valid insurance. That could be a problem if the whole reason you need an auto loan is to get a car, let alone a second car. But, we appreciate that this lender is upfront with that kind of information: many of their rivals also have requirements and limits, but you'll have a hard time finding them until you're well into the application process.

Pay attention to your loan details

Speaking of disclosure, OneMain Financial charges origination fees that also depend on where you live. Expect to pay a flat fee ranging from $25 to $400, or a percentage of your total loan ranging from 1% to 10%. You'll find your specific fees on the Loan Agreement and Disclosure Statement. While your auto loan terms will vary, OneMain publishes that their APR typically ranges from 18.00% to 35.99%, with term lengths of 24, 36, 48 or 60 months. Those interest rates are really high, compared with some of the other companies in our review - if your credit history is good. Just be sure to read your disclosure statement very carefully, and don't be afraid to shop around to get a lower rate.

Customer complaints

As a big corporation with a history spanning a century, OneMain can be expected to have its fair share of customer complaints. We were a little surprised to see more than 700 on the BBB site alone, as well as over 1,300 customer reviews that were mostly negative. On the other hand, OneMain Financial has an "A+" rating and accreditation from the BBB, and you can read for yourself the responses to those complaints from company reps. That's a good sign when negative comments receive a prompt, professional reply, and it shows OneMain's commitment to their customers.

Thousands of 5-star ratings

You'll see that commitment and customer satisfaction reflected in reviews beyond the BBB site. We found more than 20,000 5-star ratings for OneMain from clients who praised this lender for being fast, fair, and easy to work with, particularly giving kudos to the people working in the branches where the auto loans are finalized.

Strong reputation

OneMain Financial has some things going for them with respect to auto loans. Their reputation is strong, they've been in business for a long time, and they go to great lengths to be transparent with the fees and interest rates borrows can expect. On the other hand, you may have more limits - geographic and financial - when trying to borrow money for your car here, and their interest rates aren't what we would call "competitive". If you get an initial auto loan quote from OneMain, we suggest making some comparisons with other options before signing on the dotted line at your local branch.

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Continued from above

Savvy consumers know that the best way to get truly competitive rates on auto loans is by comparison shopping with online lenders. Even if you're just starting the research process, it only takes a few minutes to find out how much you're qualified to borrow and with what loan terms. With that information in hand, perhaps with a preapproval letter too, you'll be much more confident walking into the dealership and negotiating the best possible deal on the car itself.

Some providers of auto loans specialize in helping customers with less-than-perfect credit. These lenders can work with you to get a loan that you can afford, and they take into account your whole financial picture - not just your low credit score, previous late payments, or a bankruptcy in your past. Of course, if your credit history is excellent, shopping around for your auto loan online will likely turn up dozens of offers to choose from.

It's important to carefully consider several criteria when evaluating different online lenders. These factors include the following:

  • Reputation. A seemingly-great auto loan is a bad deal if the lender isn't trustworthy. What does the Better Business Bureau say about the company? Have other car shoppers had a good experience?
  • Functionality. How easy does the auto loan site make the borrowing process, from information-gathering to funding? Can you work through the steps of securing your loan quickly and intuitively?
  • Options. To whom does the lender cater (e.g. people with good/bad credit? New/used car shoppers?)? Do you have a wide range of loans to choose from, both with respect to interest rates and length of the loan period? Are there any perks or penalties in the fine print?

TopConsumerReviews.com has reviewed and ranked the best auto loan providers available today. We hope this information helps you get the right financing for your next vehicle purchase or refinance!

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