In 2020, despite months-long COVID-19 lockdowns and travel restrictions, more than 53 million vehicles were sold. This year, as Americans return to their commutes to work, summer vacation plans, and travel destinations, new vehicle sales are up 8% from last year.
However, the process of purchasing a new or used vehicle isn’t always easy. Finding the right SUV, sedan, van, or truck to accommodate your budget and needs can take time and patience. Fortunately, credit unions can help with that search. By providing low interest rates and flexible terms, credit unions give consumers convenient, economical ways to purchase vehicles.
Credit unions are different from banks. Whereas banks are for-profit businesses that make money from customers, credit unions are nonprofit financial institutions whose members are owners and receive a share of profits through dividends
There are currently more than 5,000 credit unions across the U.S., with 203 of those operating in the state of Texas. Approximately 125 million Americans belong to credit unions as of 2020. These individuals typically share similar interests or qualifications, such as attending the same college or university, belonging to the same labor union, or living in the same community.
Need another reason to hit up your local credit union for an easy auto loan? How about this: They may also offer extra vehicle protection such as multi-shield coverage, extended warranty, disability insurance, and GAP insurance at lower prices than banks. Credit unions will also issue smaller loans for pre-owned cars, whereas many banks require customers to buy newer vehicles to qualify for auto loans.
Credit unions also provide other benefits to their members, such as low interest rates on home and personal loans and high interest rates on certificates of deposit and savings or checking accounts.
Before applying for an auto loan, check your credit history. According to FICO, a “good” credit score typically falls around 670, whereas a “fair” score is between 580 to 669. If your score could use some improvement and you don’t need to buy a vehicle right away, consider taking up to six months to improve your score. A better rating could earn a lower auto loan interest rate, saving you money.
Here are other steps to follow when obtaining an auto loan from a credit union:
The auto loan application process at a credit union is similar to that at a bank. When applying, members should have the following information on hand:
Getting preapproved for an auto loan isn’t required, but it can speed up the car-buying process by helping you negotiate a lower price at a dealership or with a private seller.
Preapproval means that your credit score and history have been pulled to give the credit union a general estimate of the maximum loan amount or interest rate you qualify for. This can help you set a realistic budget before making a purchase. Trading in your current vehicle and making a down payment can also help offset the total cost of the auto loan.
Be sure to look over your auto loan terms before signing. Examine the agreed-upon fees, charges, loan length, and annual percentage rate.
The following charges are based on the standard presumptive value (SPV) of all cars, SUVs, and trucks bought in the state of Texas:
Texas Tech Credit Union offers members easy, affordable financing options for new and pre-owned vehicles, with low interest rates and flexible terms and lengths.
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