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Questions about Auto Loans? We Can Steer You in the Right Direction.

February 18, 2020

Couple purchasing a car

Cars come in many makes, models and colors, and options for auto loans are plentiful. If you have questions about loan terms, credit scores, or preapproval, we’re here to help! Follow these tips to avoid speed bumps along the way.

  1. Should I Finance Through the Dealer or My Credit Union?
    Dealers do the paperwork for you and may offer special financing on some models. And buyers with little credit history or lower credit scores will often find dealerships more amenable to extending credit. But the choices may be fewer and the terms less favorable. By financing your auto loan through RCU during our Auto Loan Rate Sale (2/1-3/31), you can take advantage of rates as low as 2.99% APR.
  2. Know Your Credit History
    You may request a free credit report every 12 months from each of the three credit reporting agencies. It’s good to know your score, since it affects your ability to get a car loan. Reviewing your reports can also offer an early warning of identity theft. If you have a loan with RCU, you can access your credit score through online banking and our mobile app.
  3. Ask About Direct Lending and Preferred Dealer Programs
    To make the process easier for you, RCU partners with auto dealerships to offer direct lending programs. That means you can complete our application at the dealership. We regularly evaluate our preferred dealers, so you can be assured you’re doing business with a reputable car seller.
  4. Should I Get Preapproved Before Visiting the Dealership?
    Preapproval has its advantages. You’ll have a realistic picture of what you can afford, which helps you research options within your means. That may improve your ability to negotiate and save time at the dealership, so you get the best deal in a reasonable amount of time.
  5. How Much Should I Spend?
    Always the big question. We’re fans of the 20/4/10 rule: Make a down payment of at least 20 percent, finance for no more than four years, and keep total monthly expenses—including principal, interest, and insurance—to no more than 10 percent of your monthly gross income. It’s easy to get caught up in the car-buying experience. Set the emotions aside and be practical to avoid overextending yourself.

Buying a car is a big decision that may feel intimidating or confusing. By taking the time to look at resources and options, you’ll feel much more confident in your purchase.

Check out our Financial Wellness Center to learn more.