Q-and-A with Ent Federal Credit Union: Everything You Need to Know About Auto Loans in Colorado Springs

A car is an important purchase — and as exciting as it is to pick out a make, model year and color, it’s far more crucial to find a quality auto loan. Luckily for prospective car buyers, auto loan rates are still at near-record lows; it’s the perfect time to lock into a fixed, low rate and enjoy affordable monthly payments for the life of the loan.

We sat down with Ent Federal Credit Union’s Director of Consumer Lending Sales and Service, Darrell Noble, to find out what Colorado Springs auto loans look like today, and what buyers can do to make sure they get the best auto loan rate possible.

GOBankingRates: How do Colorado Springs’ auto loan rates compare to the rest of the U.S.?

Ent Federal Credit Union: Interest rates offered by lenders in Colorado Springs are very competitive with rates in the rest of the country. Savvy consumers know it is important to shop and compare loan terms and features in addition to shopping loan rates, in order to find the loan that best meets their needs.

GBR: What is the ideal auto loan term length? Is it possible to finance a vehicle for too long?

Ent: Short term loans accelerate repayment and often have lower interest rates than long term loans. The end result is a lower cost of borrowing and an improved equity position. Longer term loans offer borrowers greater flexibility in their budget and the opportunity to purchase a vehicle that would otherwise be unattainable.

The ideal auto loan term is different for each individual and varies based on their unique financing needs. In order to help our members find the loan that best meets their needs — and their budget — Ent offers auto loans with terms from 48 to 84 months.

We advise our members to avoid borrowing more than they can afford and to consider the total cost of ownership, including gas, maintenance, insurance and the loan payment; it is easy for a car buyer to get focused solely on the loan payment and later regret purchasing such an expensive vehicle. Members can use Ent Federal Credit Union’s online auto loan payment calculator to help identify the ideal loan term for them.

GBR: How does Ent Federal Credit Union determine the auto loan rates it offers to members?

Ent: Ent publishes the interest rate range for each of our auto loan products, and uses a review of each member’s loan application and credit history, and whether the vehicle is new or used, among other factors, to identify the best rate we can offer each member.

GBR: What can consumers do to reduce the total cost of borrowing for a vehicle?

Ent: There are three ways consumers can reduce the total cost of borrowing for their car:

1. When purchasing a vehicle, making a down payment will reduce the amount financed and ultimately the overall cost of borrowing.
2. Making bi-weekly payments on the loan or making additional principal-only loan payments are also ways to reduce the cost of borrowing. Ent members have the ability to repay their auto loan as aggressively as they can afford to, with no pre-payment penalties.
3. And refinancing an existing loan is another way consumers can reduce interest expenses. We invite consumers who may have an auto loan with another financial institution to contact us to see if refinancing with Ent would make sense for them

GBR: What are the considerations auto loan applicants in Colorado Springs should make to ensure they find attractive terms and pick the right lender when shopping for a new auto loan?

Ent: Potential borrowers should consider checking their credit report for inaccuracies. Lenders often use credit scores to determine the interest rate that is offered. If there are inaccuracies or other errors that could be contributing to a lower credit score, correcting them before applying for any type of loan is worth the effort. AnnualCreditReport.com can be used to obtain a free copy of your credit report,

Alternatively, consider getting pre-approved for your auto loan well before you go vehicle shopping. Not all lenders will be able to offer guidance and insight about how to improve credit score, but Ent’s lenders can. The other benefit of getting pre-approved ahead of time is that you can focus your shopping on vehicles you know you can afford and finance.

When selecting a lender, there is more to focus on than just rate. Consumers should also shop the loan’s features, benefits and loan related fees. Ent offers a program called Ent Extras that includes an annual loan rebate, for the life of the loan, as well as loan payment reminder alerts and a 10 day loan payment grace period, to help members avoid late payment fees.

In addition, Ent offers an annual Skip-A-Pay option, where borrowers have the ability to skip a payment once a year, when the need arises. As you can see, there’s a lot more to consider when choosing a lender than simply who has the lowest rate.

GBR: What is the difference between financing a new car and a used car?

Ent: New cars typically cost more than used cars, which may result in a higher total loan amount, while used cars are slightly lower valued collateral for the lender, leading them to typically charge a higher loan interest rate.

GBR: How many times can a person in Colorado Springs refinance his auto loan? Is there a disadvantage to multiple refinances?

Ent: Theoretically, you can refinance an auto loan as many times as you’d like, provided you find a lender that approves the refinance. However, we recommend that our members focus on starting with a monthly loan payment that fits their budget.

GBR: How much should a person expect to contribute toward an auto loan down payment?

Ent: The amount a borrower should put towards the down payment on a vehicle is not a hard and fast rule. Some people don’t have a down payment and may need to finance sales taxes, dealer handling fees and negative equity in their trade-in.

Others have the means to purchase the car without financing but because of other savings goals, choose to take advantage of today’s low interest rate environment and borrow anyway. Certainly, the more a borrower puts down on a vehicle, less they will need to finance, which will save them loan interest in the long run. However, each individual’s financial situation is unique and they should work with a lender that can accommodate their needs and goals.