Credit Unions, The Best Car Shopping Secret
My friend Dan recently bought a new car (well new to him) 2010 Nissan Versa Hatchback. Something I recommended to him was that he look at refinancing his used car loan with some local Credit Unions around Baltimore. “You can probably get a much better rate” is what I said when checking the loan rates on websites of some local Credit Unions. Dan glanced at the used car rates on my smartphone and replied, “Nah, I don't believe it! I've have never seen used car rates that low.”
Dan's response really surprised me! First he wasn't really aware of what a credit union was. As well he skepticism about the rates surprised. Well obviously his rate may vary from what was listed on the websites, are people really so skeptical and unaware about the benefits of a credit union?
First let me explain what a Credit Union is for those don't know. Credit Unions are a non-profit banking entities that are owned by members and not shareholders. The object of a Credit Union is to benefit members with better localized personal service, better loan rates and products all with the same services a big bank would offer. All you have to do to become a member is open a Savings Account and fund it with a minimum deposit of $10 (some credit unions will vary). Some credit unions are based around a specific group, such as a postal or police union, or geographic area. Over the years many Credit Unions have opened up membership to a wider array of people though.
Credit Unions typically offer better car loan financing when compared to traditional banks. Dan told me his loan rate from the dealership was just above 6%, which I thought that was pretty good. Dan has a good credit score and a good driving record. Checking the used car loan rates at various Credit Unions around Baltimore seem to be around 2.8%-4% depending on your credit score. I was pretty sure Dan could have gone into any credit union and bee quoted a refinance rate of around 3%, which for what he paid would have been a lot of money.
If Credit Unions sound to good to be true, they aren't. They just offer better rates with better service. In my opinion they are the best car shopping secret out there!
So next time you are in the market for a new or used car, I highly recommend you look into joining a local credit union for a better loan rate. I am sure you will be pleasantly surprised.