The Difference Between M&T Bank and USAA

USAA, based in Texas, provides banking and financing services to active-duty military members, veterans, pre-commissioned officers, and eligible family members across all 50 states. M&T Bank, headquartered in Buffalo, New York, operates in 14 states and Washington, DC.

M&T Bank auto loans are a good option for those seeking smaller loan amounts or who do not meet the membership requirements for USAA. However, if you qualify for USAA membership, their car loans generally offer more favorable terms.

M&T Bank vs. USAA at a glance

USAA and M&T Bank are reputable choices for auto loans, both offering favorable terms and competitive rates. To determine which is the best fit for your financial needs, it’s wise to compare their loan options carefully.

M&T Bank auto loans

M&T Bank offers auto loans for both new and used vehicles, as well as refinancing for your current car. With a minimum loan amount of just $2,000, it’s an option for those purchasing a lower-priced vehicle or making a significant down payment. The repayment term extends up to 84 months, which is relatively long but fairly typical. Rates start at 7.24% for existing customers who set up autopay from their M&T checking account. However, this rate is higher compared to many other major banks, like Bank of America, which offer lower starting rates.

Loan offers are valid for 30 days, but M&T Bank does not provide prequalification, so you’ll need to complete a formal application and agree to a hard credit check to receive your rates. The application process is straightforward and can be completed online in minutes, with quick lending decisions.

Note that M&T Bank operates only in 14 states and Washington, D.C. Additionally, you must select your vehicle before applying for a loan, which may not be ideal if you want to determine your budget before shopping.

Pros:

• Small loan amounts: M&T Bank offers loans as low as $2,000, accommodating less expensive vehicles.
• Current customer benefits: Existing customers may receive lower rates.
• Customer support: 24/7 phone support is available, including a dedicated line for auto loans.

Cons:

• Limited availability: Loans are only offered in 14 states and Washington, D.C.
• No prequalification: You cannot prequalify for a loan online.
• Narrow shopping window: You must choose your vehicle before applying, restricting your ability to explore different options.

USAA auto loans

USAA provides car loans for new and used vehicles, as well as refinancing options, similar to M&T Bank. For new cars, USAA’s rates start at a competitive 5.49% if you enroll in autopay from a USAA account. Loan terms range from 36 to 84 months, and USAA also offers lease buyouts if you wish to purchase a vehicle currently under lease.

What sets USAA apart is its focus on military members and their families. Their car loans come with special protections and potential discounts tailored to service members, veterans, pre-commissioned officers, and their spouses and children.

You can apply for a loan in minutes and receive a quick lending decision, with funds typically available within one to three days. USAA’s loan approvals are valid for 45 days, giving you ample time to shop for the right vehicle, compared to the standard 30-day window offered by most lenders. However, USAA does not provide online pre-qualification, so a hard credit check is necessary to view loan offers.

Pros:

• Autopay Discount: Reduced rates for existing customers who use autopay.
• No Fees: No application or prepayment fees.
• Extended Shopping Period: 45-day loan offer validity allows more time for vehicle selection.

Cons:

• Membership Requirement: Loans are available only to military personnel and qualifying relatives.
• No Prequalification: Hard credit check is required to view loan details.
• Limited Online Information: Maximum loan amount and APR are not listed on USAA’s website.

How to choose between M&T Bank and USAA

Both M&T Bank and USAA offer auto loans, but each has specific limitations that may affect your choice.

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

M&T Bank is ideal if you don’t meet USAA’s membership criteria or need a smaller loan amount. Unlike most lenders that typically require a minimum loan of $4,000 or $5,000, M&T Bank offers loans as low as $2,000. This makes it a good option if you’re buying a used vehicle, financing only a small portion of a purchase, or making a large down payment.

Choose USAA for competitive rates

USAA is known for offering some of the lowest rates in the auto lending industry. While the average auto loan rate is around 6.73%, USAA’s rates start at a competitive 5.49%. Even without enrolling in autopay for the 0.25% discount, you can still benefit from attractive rates. For used car loans, USAA offers rates as low as 6.44%, compared to the industry average of 11.91%.

Remember that the lowest rates are usually reserved for well-qualified borrowers. While USAA does not specify exact eligibility criteria, you will likely need a strong credit score, stable income, and a good debt-to-income ratio to secure the best loan terms.

Compare more lenders before applying

Both USAA and M&T Bank are solid choices for auto purchase or refinance loans with competitive terms. However, it’s wise to explore other options before committing.

Many lenders provide online prequalification tools that let you review loan quotes, including monthly payments, terms, and rates, without affecting your credit score. To ensure you get the best deal, consider comparing offers from at least three other lenders before making your final decision.