Before you step into a dealership to buy a car, consider how you might finance your car purchase. To get the best car loan, you might be drawn to dealership specials and end up financing directly through the dealership or another type of private lender, including banks and online lenders.
By doing this, you could be missing out on even lower rates and a better loan experience by not going through a credit union. Many dealerships tack on fees for taking care of the financing, which can boost the overall cost of the loan.
Overall, credit unions offer the best car loan rates, which can save you money now — and over time. Even though most credit unions have specific or strict membership eligibility requirements, others have more general membership guidelines, such as living, working or worshiping in a certain area.
Best Auto Loan Rates from Credit Unions
Here’s a round-up of some of the top credit union car loans in terms of offering the lowest auto financing rates, terms and the overall best car loans to its members, ranked in order of lowest APR to highest.
|Credit Union||Car Loan APR||Loan Amount||Loan Terms||How to Qualify||New/Used||Where to Apply|
|Pentagon Federal Credit Union||1.49%||Up to 110% financing available; $500-$100,000||36-84 months||
|NIH Federal Credit Union||1.49%||Financing up to 125% based on new auto loan value||Up to 48 months||
|SchoolsFirst Federal Credit Union||1.59%||Maximum of 100% of the MSRP||36-60 months||
|Suncoast Credit Union||1.75%||Up to 125% of the vehicle’s value||Up to 72 months||
|State Employees’ Credit Union||1.75%||Up to 100% of MSRP plus additional 10% for purchase-related expenses||Up to 36 months||
|Navy Federal Credit Union||1.79%||100% financing||Up to 36 months||
|Randolph-Brooks Federal Credit Union||1.90%||125% financing including tax, title, license, and extended service contracts||24-66 months||
|Foothill Credit Union||1.95%||100% financing||Up to 60 months||
|Alliant Credit Union||1.99%||Generally 120%, but depends on vehicle||Up to 84 months||
|NASA Federal Credit Union||2.49%||Up to 130% financing for qualified applicants||Up to 36 months||
Loan amount: Financing up to 110 percent; $500 to $100,000
Terms at this rate: 36 to 84 months
Serving members in all 50 states and the District of Columbia, as well as military bases in Guam, Puerto Rico and Okinawa, Pentagon Federal Credit Union offers its members substantial options for car financing. Loans are available for both used and new cars and so are refinancing options. The credit union’s 1.49% APR for 36 to 84 months is highly competitive.
In addition to its loans, the credit union also offers an online car buying service tool. This tool allows members to search for new or used cars and get a variety of information such as its value compared with the asking price, as well an alert showing any PenFed discounts available.
Some other useful online tools PenFed offers are an auto loan payment calculator, as well as a “How Much Car Can You Afford?” tool designed to help you figure out your car budget.
Loan amount: Financing up to 125 percent, based on new auto loan to value
Terms at this rate: Up to 48 months
The National Institutes of Health Federal Credit Union, serving the biomedical industry, provides its members with flexible terms and low rates for new, used and refinancing of auto loans.
NIHFCU members can finance their loans up to 84 months, which would help lower monthly costs for people whose budgets require smaller payments. On the other hand, members who want to pay off their loans sooner and get a lower APR are able to do that if they want.
Some other budget-friendly perks include no payments for up to 90 days, bimonthly payment options to reduce interest, and the option to skip a payment once a year to increase cash flow — a helpful benefit during the holidays.
Perhaps one of the best loan features is its online application process. NIHFCU makes it handy for members to apply for financing without leaving the home or office. The application process takes just a few minutes to generate results.
Loan amount: Max is 100 percent of the MSRP
Terms at this rate: 36 to 60 months
SchoolsFirst Federal Credit union offers many financing options and deals for its members. The credit union is partnered with companies like Autoland and Enterprise to bring customers exclusive savings. It also offer discounts on Guaranteed Asset Protection insurance, options for no payment for 90 days, and contests that reward winners with a year free of car payments.
Along with all the different ways to save, SchoolsFirst also gives borrowers the choice of how they want to apply for a loan: online, on the phone or in person. Borrowers who set up automatic payments for their loan from a SchoolsFirst FCU account will receive a 0.75% APR discount.
Loan amount: Up to 125 percent of the vehicle’s value
Terms at this rate: Up to 72 months
This Florida credit union serves up a wide variety of vehicle-related products to help its member save money. From an insurance feature which walks customers through the process of finding the best deals on auto insurance to selling cars themselves, Suncoast has practically everything you need to get a new or used car.
Suncoast will also preapprove you for a loan online so you know what your budget is when you walk into a dealership. From rates as low as 1.59% APR for up to 72 months, regardless if the vehicle is new or pre-owned, Suncoast offers smart financing options.
In addition to financing and selling cars, Suncoast’s Member’s Roadside Advantage Assistance program covers up to five service events per year, including a dead battery or a flat tire.
Loan amount: Up to 100 percent of MSRP plus an additional 10 percent to cover other expenses
Terms at this rate: Up to 36 months
The State Employees’ Credit Union has valuable auto financing products for members who are looking for new or used cars. SECU’s Auto Power Program essentially gives approved customers a blank check, up to a certain dollar amount, so that they can buy a car without ever stepping into a credit union.
SECU also offers terms that exceed most credit unions, allowing customers to stretch out payments to 120 months. This long-term repayment option is only available to people who borrow $25,000 or more.
Auto financing application approval is dependent upon the following criteria:
- Ability to pay
- Credit history
If members don’t get approved for a loan, SECU can help them outline a strategy to boost their credit score, including budgeting and reporting any credit report errors.
Loan amount: 100 percent financing
Terms at this rate: Up to 36 months
Navy Federal Credit Union offers excellent car loans for financing new cars. Among its most aggressive auto loan rates is the 36-month loan with 1.79% APR interest. The longer the terms, the higher the interest rate, topping out at 4.49% APR over 96 months. Used car loans, on the other hand, have considerably higher interest rates, starting at 3.59% APR.
Borrowers can apply for a loan online and if they receive a preapproved loan, they can request a letter of guarantee to bring to the dealerships. Other benefits available to members are access to GAP insurance and a payment protection plan.
Loan amount: 125 percent financing including tax, title, license and extended service contracts
Terms at this rate: 24 to 66 months
With 125 percent financing, including all the hefty fees associated with car buying, and a low rate of 1.90% APR, Randolph-Brooks Federal Credit Union is a solid financing option.
The credit union also provides members with car buying help online, giving them information on everything from how to negotiate — using their preapproved loan as leverage to offering members who qualify — and buyer’s checks. A buyer’s check can be requested during the online application process.
Randolph-Brooks also offers payment protection plans and major mechanical protection, which is available for both new and used cars. This coverage is good for everything from transmission to air condition problems.
Loan amount: 100 percent financing
Terms at this rate: Up to 60 months
Members of Foothill Credit are eligible to get their competitive rates on new and used car loans. This credit union’s lowest rate is 36 months with 1.95% APR interest. Foothill will even sweeten these low rates by offering further discounts to members who pay their loans through auto transfer using a Foothill share account with direct deposit or payroll deduction. Members who opt for auto payment will receive a 0.25% APR discount. School and hospital employees will also receive a 0.25% APR discount.
Foothill Credit Union members also get the convenience of applying online and receiving preapproval within minutes. Members can also apply by phone, and funds are usually available the same day.
Another convenient benefit of membership is Foothill’s Skip-a-Pay Service which is helpful when you need more cash. It allows members to skip a qualifying regular loan payment for a fee of $15 online, or in-person or on the phone for $25. The loan payment would simply be deferred to the next month.
Loan amount: Generally 120 percent, but depends on vehicle
Terms at this rate: Up to 84 months
Along with offering attractive rates, such as the 1.99% APR for as long as 84 months, Alliant Credit Union also offers both new and used auto loans with same-day approval and refinancing options. Plus, borrowers can save on interest by paying off their loans early — and Alliant won’t charge any prepayment penalties.
Alliant also has a car-buying service in partnership with True Car. The way it works is that buyers look for cars online through the Alliant Car Buying Service website. The advantage of this program is that a member gets to see how much money others paid for the new car he wants. You can also get used car market values via ClearBook.
This service is designed to help people avoid overpaying for cars through reports and analysis. Plus, it removes the negotiation process from the car-buying experience, which can be a relief for some buyers.
Loan amount: Up to 130 percent financing for qualified applicants
Terms at this rate: Up to 36 months
NASA Federal Credit Union offers flexible terms and low rates for new and used car financing as well as for auto loan refinancing. Among their best auto loan rates is a 2.49% APR, to be paid over 36 months.
However, NASA Federal also gives members the option of choosing longer terms, up to 84 months, so that monthly payments are lower. Financing for a longer term will cost more over time, but it can be a huge help for people on a tighter budget.
Members can apply online and get preapproved quickly. By having financing already in place, members have the advantage at the car dealership because they can focus on negotiating the car price instead of the loan terms. NASA Federal also has a credit protection product available to its members.
Keep Reading: 3 Steps to Free Yourself From Debt
Credit unions were ranked in order of lowest auto loan APR available to highest. APRs are current as of Aug. 1, 2016.
GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions, and other financial services organizations. Some companies mentioned in this article might be clients of ConsumerTrack, Inc., which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been reviewed, approved, or otherwise endorsed by the companies included in the article.