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A Word of Caution about Credit Unions

With all the advantages credit unions offer, you would think they would have no drawbacks, but there is one thing you need to watch for.

When getting a car loan through a credit union, always make sure to setup the loan directly with them. Recently, some credit unions have started working with dealers to offer indirect lending. This is when the dealer will take care of all the paperwork and arrange the financing through a credit union.

The problem is the credit union usually pays a commission to the dealer for processing the loan - sometimes up to $1,000.

It's always worth calling the credit union directly to see what their direct lending rate is. It can save you a lot of money. Other than that, there really are no other drawbacks to using a credit union for your car financing needs.

Always contact one or two credit unions when comparison shopping your auto loan. It's one of the smartest things you can do to save money on a car loan.

My Recommendation for Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

Gregg Fidan

About: Gregg Fidan

Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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