The decision to buy a car is exciting!
But it often leaves one feeling overwhelmed by the number of decisions to make – and financing can be one of the most stressful decisions. Simply put, your credit union is the best place to secure your financing and we’ll tell you why.
The Typical Choice: Dealer Financing
Car buyers often end up choosing to finance their vehicle through the dealership, and we get it: they’re already at the dealership when they select a car, so it seems easier, and most importantly, the dealership gets the last opportunity to convince the customer to finance with them. Even customers that walk onto the lot with financing in hand from a credit union or bank often find themselves driving back off that lot in a dealer-financed vehicle.
Don’t choose 0% Financing
0% financing is good…right? Of course, 0% financing is good. But you have to pass on the rebates to get it. The real question is, should you pass on the rebates to get 0% financing? The answer is no. Your loan balance is key, for several reasons. The first reason is “what if” your new vehicle that you financed at 0% is totaled next month? Your insurance company will settle with you for a certain amount. Will that settlement amount pay the balance? It’ll be a lot closer to paying the balance if you would have taken the big rebate. Make sense? The second reason is that you’ve got to keep that loan open for the entire term to receive the benefit. Statistics show that about half of the people that choose 0% financing, for one reason or another, end up getting out of their loan before the full term. The manufacturer hopes you do take the 0% because their data proves that it’s less costly. Why do you think manufacturers advertise on TV the 0% and place the rebates in small print? If you take the rebate upfront you are guaranteeing you’ll receive the entire benefit today. Remember, loan balance is key. Also, there is very little payment difference, if any, in a 0% loan from the manufacturer and a low-interest rate with your credit union + rebate. What do car people working in the industry do? They always take the rebate and so should you!
Pre-Approval with Your Lender
A pre-approval means you know the limit you’ll be spending when you select a car. The key is to avoid going over a budget that makes sense for your personal financial security.
It’s also important to have someone actually understand and value your budget and financial wellbeing – and then help you with that. The loan officer at your credit union is on a flat pay scale, not commission-driven. Many lenders will talk about making the right decision for you, but do you trust them to be invested in it? That’s something your credit union brings to the table that can’t be guaranteed elsewhere, and there really is no way to adequately value that peace of mind.
As a credit union member, you’ve likely already have thought of many of these benefits. It’s nice to have a human connection with your lender and to do business with someone you trust. Finances can be quite complicated, and a trusting relationship with a credit union can make navigating those challenges much easier.
At the end of the day, working with your credit union is a decision to guarantee that you don’t have regrets about the financing decisions you make when you buy a car. When we started HaloCar we saw the value for the customer in working with your credit union, and that’s why we chose to partner with them. We’re confident that your lender can help you take control of your financial future while finding the car you want.
Have more questions about why we like working with credit unions, or any other car-buying topic? Give us a call, we’re here to help!