PenFed Auto Loan Review: Competitive Rates for Buying and Refinancing


PenFed offers a good range of terms for both new and used auto loans, in addition to auto refinancing. Rates are quite competitive, and limits are high. However, as with most lenders, you’ll need a high credit score to qualify for the lowest rates.

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PenFed’s Car Buying Service

Features and Benefits

PenFed’s Car Buying Service is offered in conjunction with TrueCar and offers discounted loan rates and vehicle pricing. For example, new car loan rates can be as low as 1.39% for a 36-month loan or 2.49% for a 72-month loan, versus PenFed’s standard best rates of 2.14% and 2.99%, respectively. Used loan rates can be as low as 2.24% for a 36-month loan or 3.49% for a 72-month loan, versus standard rates of 2.99% and 3.99%, respectively.

For members who have been with PenFed for at least 60 days, individual auto brands offer their own additional discounts through the program as well. For example, Audi, Ram, Jeep, Volvo, Dodge, Chrysler and Alfa Romeo offer up to $1,000 bonus cash. Fiat and Mercedes offer up to $500 cash back, while BMW provides a bonus of up to $4,000.

The four-step process for using PenFed’s Car Buying Service is as follows:

  1. Search for a new or used car.

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For new cars, you can see what others have paid through the TrueCar service, and for used cars, you can search an extensive inventory listing to see what cars are available.

  1. Lock in your savings.

Once you find the car you want, just complete a contact form to be connected with a Certified Dealer.

  1. Apply online.

Once you’ve chosen your deal, call PenFed to finalize your financing. The credit union will send out your check and loan documents.

  1. Visit the dealer.

The final step is to visit your Certified Dealer and test drive your car. If you’re satisfied, provide your PenFed financing and you’ll be on your way.

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PenFed’s New and Used Auto Loans

PenFed makes shopping for a car loan online easy, with a wide variety of loan options, online loan calculators and additional services, like GAP insurance, extended warranties and debt protection.

GAP insurance costs $449 and insures the value between the actual cash value of a vehicle and the outstanding loan amount. Extended warranties cost between $995 and $2,995 and provide an additional three to six years of warranty protection. Debt protection, which costs between 88 cents and $2.10 per $1,000 borrowed, cancels your auto loan balance or monthly payments in the event of death, disability or involuntary unemployment.

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In addition, PenFed offers Payment Saver (Balloon) loan options for members seeking lower monthly payments.

Read: 35 Ways To Slash Your Car Costs

New Auto Loans

New vehicles are vehicles without previous owners and are of a current (2021) or prior (2020) model year with less than or equal to 7,500 miles. Rates depend on terms, as follows:

PenFed New Auto Loan Rates
APR Term Loan Amounts Approximate Payment ($20,000 Loan)
2.14% 36 months $500-$100,000 $574.65
2.74% 48 months $7,500-$100,000 $440.96
2.89% 60 months $10,000-$100,000 $358.89
2.99% 72 months $15,000-$100,000 $304.22
4.49% 84 months $20,000-$100,000 $278.50

With PenFed, you can finance up to 110% of the value of your new car. Loan amounts top out at $100,000, and loans can be processed online. As the chart above indicates, loan minimums increase with term duration, and annual percentage rates increase as well. Financing is not available with a Payment Saver Loan for “smart” cars, SUVs (including hybrids) and trucks (including hybrids).

Rates are illustrative only and are the best rates available for borrowers with excellent credit history. Rates may be higher for some applicants.

Find Out: 25 Things You Should Always Do Before Buying a Used Car

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Used Auto Loans

PenFed used auto loan rates apply to all model years for terms of up to 60 months. For 72-month terms, the car must have a model year between 2015 and 2020.

PenFed Used Auto Loan Rates
APR Term Loan Amounts Approximate Payment ($20,000 Loan)
2.99% 36 months $500-$100,000 $582.89
3.89% 48 months $7,500-$100,000 $451.97
3.74% 60 months $10,000-$100,000 $367.07
3.99% 72 months $15,000-$100,000 $313.80

As with new auto loans, PenFed issues used auto loans for up to $100,000, and financing of up to 110% is available. However, there is no 84-month option. Borrowers choosing the 60-month term get a slight rate break over the 48-month option.

Rates are for borrowers with excellent credit and may not apply to all borrowers.

Helpful: 25 Tips and Tricks for Buying a Car Online During the Pandemic

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PenFed’s Auto Refinancing

PenFed offers refinancing for both new and used autos. One of the few restrictions is that you can’t refinance an auto loan already held with PenFed.

PenFed Review: Is It the Right Credit Union for You?

Features and Benefits

New refinance rates only apply to model years 2020 and 2021. Used auto refinance rates are for model years 2019 and earlier. New and used auto refinance rates are the same as new and used auto loans at PenFed. One difference is that you can only refinance up to 100% of the vehicle’s value, not the 110% offered on new and used auto loans. The maximum loan amount for refinancing is the same at $100,000.

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As with new auto loans at PenFed, the listed rates are for customers with excellent credit only. Membership is required for refinancing an auto loan. Since membership is open to everyone, non-members can apply as part of their refinance application.

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Why PenFed Auto Loans Could Be Right for You

PenFed offers competitive interest rates and a good range of maturity terms for both new and used auto loans. Additional features such as a 110% loan-to-value limit, a $100,000 maximum loan size and the Car Buying Service make PenFed a good place to shop for auto loans. You will have to become a member to qualify for PenFed auto loans, but membership is easy to come by and shouldn’t be a deterrent. You will need excellent credit to qualify for the lowest loan rates, but this is true with many financial institution. Overall, PenFed is a great place to look when you’re pricing out auto loan rates and services.

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PenFed is federally insured by NCUA. For all products mentioned, additional terms and conditions may apply.