>> Over 1 in 4 Americans choose Credit Unions, instead of big banks and car dealerships, to finance their new rides. <<
If you’re reading this, chances are you’re in the market for a new automobile
That’s hardly surprising considering Americans are buying cars in record numbers. In fact, each year the number of automotive purchases surpasses the previous year at a rate of almost 5.5 million people since 2012. This of course means a higher national total loan amount, which was over a whopping 1 trillion dollars in 2017. What’s even more interesting though is where people are going to get their auto loans and we seem to be fairly divided on where the best place to go actually is.
The big banks are leading the way with 32.6% of the population going to them for their loans. Credit Unions hold a commendable 2nd place with 27.7% followed by captive auto companies at 22.9%. For those who are unaware, captive auto companies are essentially subsidiaries of the car manufacturers themselves, such as Toyota, Honda, and Ford. This is who you’d deal with at the dealership. The remaining 16.7% goes to miscellaneous finance companies.
So where is the best place to go to make your dollar go farther?
A lot of people still finance their cars directly through dealerships because they feel it’s easier while others simply don’t know where else to go. Unfortunately, this leads to higher costs and time wasted through things like arguing about whether or not it’s “the best they can do.” National banks are one alternative, but more often than not have their own interest at heart, rather than yours, and interest rates can be marginally better than that of captive auto companies. Credit Unions however, actually care about their members and it shows through their products and customer service and they lead the industry in low interest rates.
Credit Unions have been increasing in popularity for auto loans
Just in the last two years, credit union auto loan totals have increased by 72 billion dollars nationally. Coincidence? Anything but. Americans are learning that credit unions are the best place to finance a car by a long shot. This is due to a few reasons:
- Credit Unions offer much lower interest rates than the alternatives. On average, Credit Union rates are 2 percentage points lower on new cars and 2.25 percentage points on used cars.
- By getting pre-approved prior to car shopping (much like home buying), you know exactly what you can afford and what your monthly payments will look like.
- You’ll spend a lot less time at the car dealer. By bringing a pre-approval letter, you’ll avoid a lot of the haggling process in their finance office because the dealership will know exactly what you can afford.
- Often times, Credit Unions offer one-on-one consulting to help you budget and discover what you realistically can afford. Yeah, weird concept right? They actually care about the people using their products.
Car buying should be a fun process, make it so! By going to a Credit Union, you’ll know exactly what you can afford and walk onto car lots prepared and educated. Credit Union financing puts you in charge, not the salesmen.