Car Buying - Credit Unions

When going to buy a new car or a used car, people might consider their credit unions too as a financing option. As a credit union member, you might know that the credit unions offer many benefits like low interest rate auto loans, great service tailored to your needs, etc. While going on a car buying spree, most credit unions would provide the same basic products that banks would offer: Checking and savings accounts, credit cards, home loans, new car loans, etc. They also offer savings and auto loans.

Credit unions have been leaders in auto lending and new car loans. The CUs offer some of the best auto-loan rates than any financial institutions, according to a recent survey. Hence, customers should always check with their CUs before accepting a no-interest new car loan from a dealer. The credit unions now also offer different rates to people with different level of credit scores.

So, in all probability, it is possible that you can get an auto loan even if you have bad credit. But the only condition is that you have to work hard to get a deal which suits all your needs. An advantage in using credit unions for auto loans is that the CUs do not charge monthly service or check-cashing fees. There is also an ease of saving and borrowing offered by a credit union.

Internet resources like Secure.AutoCreditFinders.com would also help you find good rates and loan information. Search for a good bargain at SearchBargain.com and RoadLoans.com. These sites offer easy financing options. You can also check out sites like Autobytel.com, Autoweb.com, CarSmart.com, Cars.com and MyAutoLoan.com for good car buying information.

Credit union services are more favorable than banks because the former are non-profit financial institutions owned and operated by their members. They are not obligated to return any profits to the stockholders. Recently, 30 credit unions are participating in a statewide financing system with 120 auto dealers. Dave Fearing, CEO of Ohio Credit Union League's OCUL Services Corp. business subsidiary in Dublin, gave this information.

Car Buying – Comparison

Do some research before jumping into an auto financing option offered by the dealer. Try the credit union rates and do some arithmetic. Refer to the chart given below for an example of a 3-year term on a $22,000 vehicle at 0% vs a $2,000 rebate and a CU loan at 6%.



As seen in the chart, if you take the rebate the new car or used car price falls by $2,000. You are reducing the car buying financing amount with the rebate and in combination with the Credit Union's low rate the overall costs are very low as compared with a special financing offer.



The above chart shows an example of a 4-year term on a $19,000 new car. If you are taking a $2,500 rebate, the cost of the car drops to $16,500 and the monthly payment is lower versus taking the zero percent with no rebate.

So to ensure that you get the best deal on a new or used car loan, contacting your credit union is the best idea. While going out on a car buying spree, it would be wise to step into the CU office to find out about their auto financing rates and then visit the new car or used car dealer to complete the financing.