The insider secret to financing a vehicle.
When you are buying a new vehicle, it often seems easier to just finance through the dealership. However, it can actually save you more time and money overall to finance through a credit union. Prior to purchasing a new vehicle, you should apply for an auto loan through a credit union, like Kelly Community. An expert loan officer will pre-approve your loan for the amount you can comfortably afford, that can then in turn be used for negotiating better pricing while you are shopping at a dealership.
How does this pay off for you?
Today, most auto loan rates at credit unions are lower than financing through banks or used car financing. Let’s use this example.
Let’s suppose you’re financing $30,000 for 60 months and your credit union offers you a rate of 3.15%. That would make your monthly payment $541 and your total interest paid over the life of the loan $2,464. However, if the bank across town offers the same loan at 5.15%, your monthly payment will be $568 and your total interest paid will be $4,092. That’s a significant difference.
Credit: CU Insight
Financing through your credit union prior to shopping for your car also means you know you can actually afford your pre-approved loan. Meaning before you talk to a car dealer, you’ll have specific numbers for your maximum total purchase and monthly payments that are in your best interest. Since car dealers generate income from your purchase, you can rest assured that your credit union is protecting you from being swayed into biting off more than you can chew financially.
Finally, spending some time with a loan officer before going to the dealership means saving time spent crunching numbers and negotiating at the dealership. Which means the power is in your hands, and you get to take your new ride off the lot even sooner.