August 22, 2022
So, what’s the difference? Read on to find out!
Auto loan financing, whether at the dealership or your credit union, provides the funds necessary to purchase that car, truck, or SUV you’ve been eyeing. Often times, you put some money down or have a trade in, and the rest of the purchase is covered by the loan.
Generally, the shorter your term, or length of time of the loan, the higher your monthly payment will be, but you usually get a better interest rate than if you go for a longer term with a lower payment. The term is determined by a few different factors, some of which being the year of the vehicle, mileage, and price.
It’s likely alluring to finance the car of your dreams right at the dealership. One stop shop, get it all done at once. You find the car, arrange to pay for it, then drive off the lot within a few hours. The dealership likes that too. They benefit from it in two ways, they make money off your purchase and off of you financing with them, which can sometimes mean you pay more in interest on your loan.
Dealerships often market to customers with compromised or poor credit, making financing with the dealership more desirable. A dealership has TONS of lenders at their disposal who offer products for those struggling to get financed directly with their financial institution, so it sometimes feels easier to work directly with them. A downfall to financing at the dealership may be that if you miss a payment or two, you could find yourself dealing with a lender halfway across the country who has no direct relationship with you. They are not likely to be as accommodating as a local financial institution, and they may repossess the vehicle, do what they can to limit their loss and move on, with little to no concern for you.
On the flip side, if you have perfect credit and know what you can afford on a car payment, this may be a great option for you. A one-stop shop could be the place for you because with an excellent credit score and clean credit history, you’ll get a great rate anywhere. A dealership may even be able to offer you rebates that you wouldn’t necessarily get if you financed through a credit union, making this a better option for you.
You’ll always be in good hands if you finance your vehicle at Grove City Area Federal Credit Union. We are not-for-profit, meaning we’re not trying to make money off you, which allows us to make loan rates lower and more affordable.
GCAFCU is also more flexible when it comes to considering your credit history. We listen to your specific scenario and don’t approve or deny applications simply off your credit score alone. There are many different factors that come into play when it comes to decision making and having a deeper understanding of your credit history and your story is one of them.
While we may be smaller in size in comparison to the financial institutions taking on the loans at the dealership, we are known for our top-notch member service. We strive to provide a personal touch when working with our members and offer education on your individual credit. We have great resources from extensive training we’ve received to help you better understand your credit and credit history. That’s knowledge you can carry for life that can have a huge positive impact on you.
When it comes to getting an auto loan, a great first step is to get pre-approved. A pre-approval or being pre-qualified means we have already reviewed your credit report and credit score, as well as your income, payment history, and employment history. This will give you an idea on how much you can borrow, what your interest rate will be, and roughly what your payment will be as well, all before stepping foot on the car lot.
The process is simple and usually pretty quick. Some pros of getting a pre-approval on an auto loan include:
There is a lot of decision making involved in purchasing a vehicle, let us be there for you during this exciting, and possibly stressful, time to help take the edge off and give you peace of mind. We want to help make car buying enjoyable while not taking up too much of your time in the process. We offer low loan rates with affordable terms. We have the funds you need and the convenience you desire!
You can apply over the phone at 724-458-7520, in person, or online.