Auto Dealer vs. Credit Union Financing:
What’s the Difference?
Here’s a quick Q & A with our Lending Supervisor, Callie Gibbs, on the benefits of getting pre-approved with USAgencies before you set foot in the dealership, and what to do once you get there…
Q. What are some of the benefits of getting pre-approved before shopping?
A. When you get pre-approved with us our loan officers work hard to make sure you are educated before you go shopping. We do our best to put you into the lowest rate and most comfortable payment possible. You help decide what your loan will look like, instead of someone else putting you in a box. Ensuring your loan is here means you get personalized service from beginning to end.
Q. What does the pre-approval process look like at USAgencies (if I’m buying from an auto dealership)?
A. You can simply apply online anytime of the day or night, or call us during business hours for a quick decision. Once approved, we do offer an Auto Check. That is a “blank” check good for up to your approved maximum. You just write it out to the dealer as if you were paying cash. Once that check clears our account, we call you and finalize the terms of the loan. We also now have the option of electronically signing your loan documents to make the process as easy as possible.
Q. What if the dealer tells me they can offer me a better rate? Should I take it?
A. A better rate isn’t always as good as it seems. The dealer wants to find you financing because they GET PAID for that. We don’t believe that we should have to buy our members’ loans. We want to EARN your business through excellent service. Even 0% interest really means the price of the car is increased to begin with; nobody gives money away for free! Besides that, if you are already pre-approved, and the dealer offers you a better rate than we have, check with us first. We always quote a base rate up front, and sometimes we have discount options available.
Q. What if my credit is less than stellar? Should I assume that the dealer is the only one who can finance me?
A. Absolutely not! We have a great loan program for our members with “less than stellar” credit. If your initial rate is over 5%, every year that you pay us on time, we automatically reduce that rate by .50% (until it reaches 5%). This will not only reward you for on time payments, but also take a lot of time off of your loan, saving you money!
Q. Should I take the dealer warranty/GAP?
A. This is NOT recommended. Here at USACU we offer all the protection that you need: Add-On Warranties, GAP, and Debt Protection for Loss of Life, Disability and Involuntary Unemployment. We want you to feel secure in knowing that your loan, credit, financial well-being and vehicle are protected. The dealer offers some of these things as well, but at a much higher cost… and, their little secret is the more the finance person can get you to pay, the more they put in their own pocket!
For more Q & A with Callie, you can contact her directly:
Certified Financial Counselor