More than 121 million people in the United States are members of a credit union. It might be easy to overlook credit unions as the best available lending option as an outsider. This would be a mistake though, as credit unions are accessible and offer benefits that other lenders may not. One of the lending areas that credit unions excel in is auto loans. An auto loan from a credit union might be the best lending route you could take!

When looking for an auto loan, it is very easy to get overwhelmed by various lender options or get complacent and take the dealership’s financing. Luckily, ALLIANCE is here to make picking the right lender more transparent for our members! Let's explore four reasons you should check out a credit union for your next car loan.

Low-Interest Rate

For People, Not Profit. It is more than a catchy mantra. At ALLIANCE, it is the words that drive our institution forward. We are dedicated to providing our members with the lowest rates and best deals available. Credit unions are not-for-profit organizations that reinvest all of their profits back into their members. Thanks to this, credit unions are typically able to offer their members lower interest rates on loans than any other type of lender. Auto loan rates from your local credit union could be 1% to 2% lower than the rates offered by most traditional banks.

According to the National Credit Union Administration, as of September 2020, the average bank APR for a new-car loan with a five-year term is 4.96%, while the average credit union APR is 3.18%. If you were to finance a new $25,000 car at 4.96% APR on a five-year loan, your monthly payment would be approximately $283. But if you get a five-year loan for the same new car at 3.18% APR, that purchase would cost you around $271 a month. That may not seem like a big difference, but if all other loan terms were the same, that difference in interest rate alone could save you $724 over the life of the loan.

It is hard to find a better rate at a car dealership. This is because dealers work with multiple lenders who review loan applications and determine whether to finance a loan and what interest rate they should offer. Additionally, it may be difficult to negotiate a better deal for the car and the financing you secure.

Better Approval Odds

Credit unions are typically more willing to work with their members who have less than perfect credit scores. As a member of a credit union, you are more than just a number. If your credit score is less than desirable, a Credit Union Financial Service Officer will help you develop a plan to turn your credit around. Credit unions put their members first and attempt to find the ideal strategy to help them thrive financially.

Lower Fees

As a credit union member, you can enjoy various benefits beyond your auto loan. Credit unions are set up to give back to their members. This means you may be able to get lower interest rates on other types of loans. You can typically receive reduced fees and higher interest rates on deposit products, too. Credit union members enjoy this benefit thanks to the non-profit business model that credit unions operate under. In addition to lower fees, you can expect a more hands on personalized approach to customer service. Credit unions like ALLIANCE, put their members’ needs first. As a member of a credit union, you can expect excellent service and lower rates and fees.

Almost Anyone Can Be a Member

While you need to be a member to get a loan from a credit union, credit unions like ALLIANCE make it very easy to be eligible! If you live, work, or worship in Lubbock County or its eight surrounding counties, you are automatically qualified to become a member. Many eligibility requirements are based on where you live or work or the types of organizations you belong to. Additionally, ALLIANCE offers many other paths to membership so do not assume you do not qualify! If you want to get a loan through a credit union, you'll likely be able to find one where you're eligible for membership.

Find The Right Car for You

These are challenging times to find a new car. Due to supply chain issues and increased demand, cars are simply flying off the lots. Thanks to a computer chip shortage, there is a significant deficit of new vehicles. This shortage has made the used car market explode in volume. Thankfully, when it comes to getting your new car, ALLIANCE is here to help you get there faster! Using our new Auto Link feature, you can shop for new and used vehicles in your area. Simply input your desired make and model and enter your zip code to find available cars near you!

Finding a new car in this market can be difficult. Thankfully, as a member of ALLIANCE Credit Union, we are here to make your car search much easier. Visit our website to see how ALLIANCE can help you get behind the wheel faster!