M&T Bank vs. USAA: Which offers better auto loans?

Based in Texas, USAA offers banking and financing solutions to active-duty military members, veterans, pre-commissioned officers and qualifying relatives in all 50 states. M&T Bank is a financial institution headquartered in Buffalo, New York, that serves 14 states and Washington, DC.

M&T Bank auto loans are ideal for individuals who want to borrow a small amount or don’t meet the membership criteria for USAA. But if the latter doesn’t apply, you’ll likely find that USAA car loans are the better deal.

M&T Bank vs. USAA at a glance

USAA and M&T Bank are reputable options for auto loans. Both offer loans with generous terms and competitive rates, but you should compare the two to decide which works best for your financial situation.

M&T Bank auto loans

Best for non-military borrowers

Bankrate’s view

M&T Bank offers auto loans for new and used vehicles, or you can refinance your current vehicle. The minimum loan amount is just $2,000, which can benefit borrowers looking to purchase a lower-priced car or make a hefty down payment.

You’ll get a repayment term of up to 84 months, which is on the higher end but not out of the ordinary. Rates start at 7.24 percent for current customers who opt for autopay from their M&T checking account. Multiple other big banks, such as Bank of America, offer starting rates at least a percentage point lower.

Loan offers are valid for 30 days. However, M&T Bank doesn’t offer prequalification, so you’ll need to formally apply and agree to a hard credit check to see your rates. The upside is the application process is simple, and you can apply online in minutes. Plus, the lender claims to issue quick lending decisions.

Keep in mind that the M&T Bank only offers loans in 14 states and Washington, D.C. It also requires you to select the vehicle before applying for a loan. So, if you want to know how much car you can afford before shopping, M&T may not be a good fit for you.

Pros

• Small loans: M&T Bank offers loans as small as $2,000 to cover a wide range of less expensive vehicles.
• Current customer benefits: You may qualify for lower rates as an existing customer.
• Customer support: Phone support is available 24/7, seven days a week. M&T even has a dedicated phone line for its auto loans.

Cons

• Limited region: Auto loans are only available in the states M&T serves — which means it’s limited to residents of 14 states and Washington, D.C.
• No prequalification: M&T Bank doesn’t offer online the ability to prequalify for an auto loan.
• Narrow shopping window: Unlike most lenders, you must disclose vehicle information before applying, which will limit your ability to shop.

USAA auto loans

Best for competitive rates

Bankrate’s view

USAA offers new and used car loans as well as refinance, just like M&T Bank. For new vehicles, rates start at a highly competitive 5.49 percent — provided you sign up for autopay from a USAA account. Its loan terms are similar as well, lasting anywhere between 36 to 84 months. And unlike M&T, USAA offers lease buyouts if you want to purchase a vehicle you have a lease on.

What makes USAA stand out from most other lenders is that it works specifically with military members and their families. Military car loans come with special protections and may include extra discounts to help you save more money when you buy a car. USAA works with U.S. military service members, veterans, pre-commissioned officers, and their spouses and children.

Like M&T Bank, you can apply in minutes and get a quick lending decision, with funds arriving in one to three days. Loan approvals are valid for 45 days — most lenders only give you 30 days to shop. Plus, this extended timeframe gives you more time to find a vehicle that works for you. Still, USAA does not offer online pre-qualification if you prefer to explore loan offers without impacting your credit score.

Pros

• Autopay discount: USAA offers an autopay discount for existing customers to help lower borrowing costs.
• No fees: You won’t have to pay an application or prepayment fees when you get an auto loan from USAA.
• Long shopping window: Unlike M&T Bank, USAA auto loan offers are valid for 45 days, giving you plenty of time to shop.

Cons

• Membership required: Loans are only available to service members and qualifying relatives.
• No prequalification: You will need to undergo a hard credit check to view loan offers.
• Limited info online: Maximum loan amount and maximum APR are not currently listed on USAA’s website.

How to choose between M&T Bank and USAA

Both lenders come with limitations in terms of accessibility. M&T Bank only serves borrowers in 14 states, and USAA loans are reserved for service members, veterans and qualifying relatives.

Choose M&T Bank if you’re seeking a small auto loan

M&T Bank is a better fit if you don’t meet USAA’s membership guidelines or need a small auto loan. Most lenders require you to take out a loan of at least $4,000 or $5,000. But with M&T Bank, you could get a loan for as little as $2,000.

A smaller minimum loan amount works if you’re purchasing an older used vehicle or your first ride. It could also work if you want to make a sizeable down payment on a vehicle and only need to finance a small amount.

Choose USAA for competitive rates

USAA has some of the lowest rates in the auto lending industry. The average auto loan rate is around 6.73 percent, but USAA starts at a very competitive 5.49 percent. Even if you choose not to enroll in autopay and receive the 0.25 percent discount, you can still access an attractive rate. The same applies to used car loans — USAA offers an APR as low as 6.44 percent, but the industry average is 11.91 percent.

Be mindful that the lowest rates on auto loans are generally available to well-qualified borrowers. USAA doesn’t disclose specific eligibility guidelines, but you’ll likely need a strong credit score, a consistent income and a reasonable debt-to-income ratio to qualify for the best loan terms.

Compare more lenders before applying

Both USAA and M&T Bank are reputable options if you’re in the market for an auto purchase or refinance loan with competitive terms. Still, it’s worth shopping around with other lenders before securing a loan.

Many lenders offer online prequalification tools that let you view loan quotes, including monthly payments, terms and rates, without impacting your credit score. If possible, compare at least three other lenders before moving forward to find the best deal.