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In my experience, a credit union is by far the better choice for a car loan. I have had to borrow for vehicles 3-4 times. Half of the loans were through commercial banks and half were through credit unions. The credit unions gave me better loan rates, were easier to work with, and didn't even mention if I inadvertently missed my payment date by a couple days. By contrast, the banks I have gone through are only out to make a buck , bottom line, and cried bloody murder if I didn't have the payment in before a certain TIME on the day it was due. The reason for this is probably because when you become a member of a CU, you become a part owner/shareholder of the CU. Your loan is backed by the other members (owners/shareholders) of the CU just as you (as an owner) would back a loan to one of them. I have been a member of my CU for around 20 years and right now I have a $12000 loan on my present vehicle at 7 percent interest with no money down. These were very favorable terms compared to a commercial bank even with a prior bankruptcy on my record. In fact, the commercial banks wouldn't touch me because of the bankruptcy. So I would urge you to explore that avenue and see if you qualify to join one and get that loan.

Source(s)

20 years as a Federal CU member

by flatlander70

2 years ago

Asker's Rating: 

It really depends on your credit...what interest rate you will be able to get. Credit Unions do usually offer the lowest rates in my opinion. You do have to be a member. I have not encountered any downsides to being a member.

by saved_by_grace- 2 years ago

Credit Unions are experts in Car Loans that is how they so much of their business. You become a member of the CU in your area by opening a Share Draft (SAVINGS) account usually for a nominal amount. Then you can apply for a loan with them. Rates can be attractive. Search the Internet for current credit union rates in your area? Or get a Pre-Approval Letter from your Bank or Credit Union before you go car shopping? The dealers are hurting for business so you (The Consumer) should be able to get a good deal if you search and shop around and compare to more than one dealership. You may even consider driving to another city outside of your area if you are in a metro or suburban area and see the price differences? GOOD LUCK! :-)

by Jedi Master YODA- 2 years ago

Ouch 11% That's terrible. Don't borrow to buy a car. Talk about pouring money down a hole! You have the depreciation in addition to the interest.

by en tu cabeza- 2 years ago

I firmly believe in credit unions. You should look into buying a used car and saving your money and work on your credit rating. Once established you can get a loan at 5-6 %. 72 mo is too long. The more you put down the less your payments.

by wahini on shore- 2 years ago

Yes. I went through a CU with the car that I just paid off and they got me a rate that was HALF what the dealer could get me! I am looking into another car now and will definately go with a CU again. Hope this helps.

by Gary A- 2 years ago

My husband and I belong to LAFCU our car loan was 5%.Why on gods earth is you loan 11% as said above that a waste of money.

by Crazy Cat Lady >^..^<- 2 years ago

It is possible a CU may be able to give you a lower rate - according to your credit score of course - and my CU actually runs specials a lot depending on what year car you are looking to buy...I think currently it has as low as 6.5% if you buy a used car at 2004 or newer. There are no downsides to being a CU member. In fact, I have seen a lot of benefits. I have been a member for about 13 years, and I have free online banking and the ability to transfer money over the phone, it offers decent loan and CD interest rates, and I also get a discount on my car insurance because I am a CU member. I recommend it highly! Best wishes in getting your loan!

by chels929- 2 years ago