Car Loan – Pre-approval

Save time and money by getting pre-approved for a car loan at Millstream Area Credit Union. Contact us today and we will get you signed up!

Get a FREE CARFAX (cost of CarFax will be reimbursed when loan funds are disbursed)

Zero Interest often costs more:

When a car dealer offers a zero-interest deal, there is almost always an unspoken option to get a discount for paying cash (meaning financing somewhere else and paying the dealership for the car completely). Usually the cash discount is the same as the amount of interest you would be paying to finance with the dealer.

• For example: Dealer offers you a zero interest loan for 2 years on a vehicle and the purchase price (taxes and fees) is $20,000. That same vehicle, if purchased with cash, could cost $18,000.
• Read the fine print before you sign – lots of these offers are accompanied by an agreement that if you are late on one payment your interest rate will go up. You could be stuck with a high interest rate from one simple mistake.
• Vehicle Cost – Since the dealer earns no profit for 0% financing, you could end up covering that loss in another area of the purchase. For instance, you may end up paying the full sticker price or you may have to purchase without the benefits of rebates that are offered, in order to qualify.
• Not All Models Qualify – 0% financing is normally offered on vehicles that have a very low demand, these vehicles depreciate faster and have a lower resale value than higher-demand vehicles. Also, you could be forced to select from vehicles that the dealer has in stock, sacrificing color, options, or other special features you want.
• Monthly Payment – Most 0% offers are for short time periods; 12, 24, or 36 months. As a result, your monthly payment could be higher than you would like. It is generally easier to pay smaller amounts over a longer time frame, even if the interest rate is slightly higher. With most credit unions you always have the option of making additional payments to accelerate your pay off, reducing your overall interest paid, without prepayment penalties.
• Are you Eligible – Dealers often restrict 0% financing to those buyers with spotless credit records and may also require a large down payment. If you do not qualify, you could be bumped up to a much higher interest rate.

Dealership Fees:

Dealerships charge hidden fees for EVERYTHING! What’s worse is IF they tell you about them, they use terminology no one could expect the average consumer to understand. Some examples include:

• GAP Insurance – this insurance covers the “gap” between how much you owe on a loan and how much the insurance company says it is worth in the event of an accident totaling it or it being stolen. Our cost for GAP Insurance is $275.00, Dealership cost is typically $600-$700.
• T&L and docs – Taxes and Licenses and Document Fees – These fees will be charged by the dealership whether you finance with them or somewhere else.

The following chart illustrates the advantages of a Credit Union auto loan compared to a 0% dealer loan when the rebate is used as a down payment on the vehicle to reduce the amount financed. Savings is calculated on (Amount Financed – Rebate + Interest Paid).

*Resource – www.autobbysite.com/ZeroFacts.asp

Feel free to call and schedule an appointment with a loan officer to obtain a same day pre-approval, or just stop in! When you come to our office we will ask you for the following documentation:

• Recent Pay stub (must be within 30 days; self employed = 2 years tax returns)
• Two forms of Identification, which could be two of the following:

• Valid Driver’s License/State ID
• Passport
• Social Security Card
• Birth Certificate
• MACU Membership Card

Additional benefits to being pre-approved through Millstream Area Credit Union - know upfront how much you have to spend, automatic payment option, stay within your price range, more confidence at the dealership – bargaining power – ability to negotiate.