Negotiations between car salesmen and perspective buyers typically involve two points of leverage, the price of the car and the interest rate of the auto loan.

In a nationwide trend, banks are taking care of the interest rate, so more car buyers can focus on negotiating the sticker price.

For the first time in years, banks are growing their share of auto loans faster than, and at the expense of, captive finance companies like General Motors Acceptance Company, Ford Motor Credit Company and other major automobile manufacturers.

"The ongoing rates available from banks is very competitive to that of finance companies and that has not always been the case," said Jim Cargill, sales manager at Arvest Bank.

One of the primary reasons for this shift is that banks are getting much more aggressive in their rates and terms for auto loans due to soft loan demand in other areas, primarily commercial and development loans.

Cargill said over the past five years, the real estate industry has had a tough time as the market has been in a state of recovery.

"People are hesitant to get involved in development until that settles down," he said. "Banks took an interest in real estate prior to that time. We’ve now shifted our focus to promote the consumer side where there is more interest."

Automobile loans have been increasing nationwide for the past several years — 6.7 percent from 2011 to 2012 and 10.2 percent from 2012 to 2013.

A recent study by Experian Automotive shows that banks hold $290 billion in outstanding loans for the first quarter of 2014 while captive financing companies hold $221 billion. Additionally, year over year data from this same study shows that bank loan balances have increased 13.8 percent while captive loan balances have only increased 4 percent.

For consumers, this aggressiveness from banks can mean a better deal because, armed with a low-rate auto loan from a bank, they can negotiate with a car dealer strictly on the price of the car.

Previously, when banks were charging market rates for auto loans, consumers were often best served getting their car loan from the auto manufacturer’s finance companies so they were, in effect, negotiating both the financing and the car price at the same time.

But with banks offering auto loan rates as low as 2.5 percent, consumers might now be best served financing their autos through a local bank and negotiating only the price of the car on the car lot.

"You want to do well on both aspects, so we advocate if you want to borrow money come to the bank, and if you want to buy a car go to the dealership," Cargill said.

Car dealerships are often well equipped with sales people, Cargill said, but there are usually only one to two people dedicated to financing.

Arvest Bank covers six counties in Central Arkansas with 40 full-time dedicated people who take consumer loan applications including auto loans.

Arvest Bank has seen auto loans increase significantly – more than 13 percent since 2011. Arvest is offering an auto loan rate of 2.49 percent APR available up to 48 months with a minimum credit score of 700 or higher.

Cargill said summer is a time when people are more likely to trade in their vehicles for a newer model or something they’d like to take on a road trip, but he suggests visiting a bank before taking a test drive.

"We se many people get excited about the car and bite off more than they can chew," he said. "I suggest getting financial advice and let that guide what you buy."

Arvest Bank is open Monday-Friday from 8 a.m. to 7 p.m. and Saturday from 9 a.m. to 1 p.m. For more information visit

(Staff writer Michelle Corbet can be reached by email at or by phone at 505-1215. Send news at