Why Credit Unions are the Best Source for Auto Loans
Credit unions are not-for-profit "banks" that are run by members with the sole purpose of providing reasonable loans.
You should always include one or two local credit unions when comparison shopping your auto loan.
Here are some of the advantages credit unions offer when it comes to getting a car loan:
Credit Unions are Trustworthy & Competitive
Since credit unions are not-for-profit and owned and run by its members, they have a vested interest in making sure their members are financially healthy and have access to the best rates.
Any excess revenue generated by a credit union is used to offer members lower fees and better rates. Many credit unions also offer financial education and sometimes even un-biased car buying advice to its members and the public.
On top of all this, you'll oftentimes find the lowest auto financing rates through a credit union.
Credit Unions are Great for First Time Buyers
Since credit unions are more community-based, they are more likely to consider loaning to a first time borrower or people with little credit history.
Unlike banks and other financial companies, they will not try to rip you off if you have bad credit or no credit. You may not get a loan, but at least they're not going to take advantage of you.
If you have a good explanation why your credit is bad, credit unions are more likely to listen and consider lending to you, especially if you've been a member for a long time.
Credit Unions Charge the Same Rates for New or Used Cars
Most banks and other lending institutions charge a higher rate for used cars versus new cars. Credit unions, on the other hand, loan money based on the individual, not the vehicle.
If you need a car loan on a used car, you'd be a fool for not including credit unions when comparison shopping.
My Recommendation for Car ShoppersTrueCar No-Haggle, CarsDirect, and NADAGuides 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
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid