When shopping for new wheels, your first stop should be your local credit union. While many people start at the dealer’s lot, you’ll enjoy a lower rate, a simpler loan application, and other big benefits when choosing to finance your car at your credit union.
Let’s take a look at the differences in the auto loan process.
At a dealer’s lot, the dealer will likely try persuading you to push your self-imposed car budget to the max or even to go over your ceiling price. They have many tactics to get you into something more expensive, not always better.
But, if you’re financing your car through the dealer, that’s only the beginning. Once you’ve chosen your car, you’ll need to submit a complicated auto loan application form, which the dealer sends to the finance companies it partners with. This can include lenders and financial institutions – even credit unions. The dealer will then share the lender offers with you and ask you to choose.
However, in most cases, the dealer is only the middleman. This means they will present your options in a way that most benefits them – and not you.
Most lenders will pay a larger commission for a car sold at a higher price and for a loan established at a higher APR. As a result, your dealer will always try to get you to sign up for a more expensive loan than what the lender is actually willing to offer you. They will even present an offer from your credit union at a much higher rate than it is or may not be presented at all.
When you work with a credit union, you’ll deal with people who know who you are and your financial reality. No one will try to push you into a loan you can’t afford. When you succeed financially, the credit union does too. Their top priority is your financial well-being.
The process of applying for an auto loan is simple, quick, and easy. You can even apply online or over the phone. Also, as a credit union member, you already have a headstart on getting that pre-approval.
A lower APR is one of the biggest advantages you’ll have when financing an auto loan through your credit union. You’re working directly with the lender, and you’ll only hear the actual rate they offer instead of the marked-up rate the car dealer presents to you. Also, credit unions famously offer loan rates that are consistently lower than those offered by large lenders and banks.
Another advantage you’ll enjoy is a pressure-free setting when determining how much you can afford to pay monthly for your new car. In contrast, when standing on the dealer’s lot surrounded by cars you wish you could afford, you’re more likely to make a decision you’ll regret later.
While going directly through the dealership might seem more convenient, you will end up paying more in the end. That is why you should finance your car with a credit union. Elevate Credit Union would love to help you out with your next auto loan. Find out how we can help you today!