Should you buy a car through a credit union?

Buying a car can be a confusing process to navigate, especially when you’ve never done it before. However, there may be a service you don’t know about that could help you!

I recently purchased a car for the first time and ended up buying through a credit union partner service. Many credit unions have extra perks or rewards programs that you can join like Love My Credit Union Rewards.

The caveat is that you usually must be a member of the credit union if you’d like to utilize a perk like this. You can find a ton of information about credit unions here on Clark.com and at MyCreditUnion.gov.

How I bought my car through my credit union

I knew that I wanted to buy a “new to me” used car and that I would get loan financing from my credit union. Money expert Clark Howard advises that you pay for a car completely in cash, but I decided to use this auto loan as an opportunity to build my credit.

As I was working with a lending representative, she told me about the Credit Union Carfinders service. I also learned that if I bought a car through this service I would get a .25% interest rate reduction on my auto loan. I was still doing my own research on cars and thought I had found one, but allowed her to send my information to the partner service anyway.

Later that day, a representative from Credit Union Carfinders contacted me for specifics about the type of car I was looking for and my budget. I had already decided that I was in search of a 2011 or 2012 Honda C-RV and wanted it to have around 100,000 miles.

Being specific isn’t always a good thing

When looking for a car, the name of the game is flexibility. I know that I like C-RVs, so I decided to stick with Honda. However, Clark’s guide to buying a used car recommends skipping Hondas and Toyotas if you want an ultra-cheap car because of these brand’s high resale value.

Since Credit Union Carfinders buys vehicles at auction, Hondas and Toyotas are often sold above their base auction value. The service does have the vehicle checked onsite by a certified mechanic before the transaction is completed as well.

The car buying process

Because the service buys the cars at auction, the whole process took about a month once I was in contact with them. The representative sent me emails with info about C-RVs going up for auction, including a free Carfax report! Clark recommends getting a Carfax report, but they can cost up to $40 each, so this was a big money-saver.

If I responded that I was interested in that car, the representative confirmed my total budget, the amount I would pay out-of-pocket and the amount that would be covered by my loan. He then called me the morning of each auction to make sure that I did not have cold feet about the purchase.

I upped my budget a few hundred dollars for the auction, where I finally got my car. After my bid won, the car was checked by an onsite mechanic, who found no problems with it. This service should not be a substitute for getting a work-up done by a mechanic you trust.

The car was sent to a holding facility for a few days, then delivered to me. All I had to do was sign a few documents and the keys were mine!

The pros:

  • The representative found the actual car, freeing up the time I would have spent searching further
  • I got a .25% break on the interest rate for my credit union-issued auto loan because I used their service
  • The car was delivered directly to me at a convenient time
  • It was the car I wanted with the trim package I wanted for a price I could afford

The cons:

  • The process took about a month, so if you need a car fast you may want to pursue other options more aggressively
  • I increased the amount I was willing to spend in order to get the car I wanted
  • I could not get it checked out by my own mechanic before the purchase was completed

Takeaway: Buying a car through a credit union

I would recommend this service to someone who has money saved to purchase a vehicle, but who also may take out a small loan to aid in credit-building. It’s also helpful to someone with a busy life, but time to wait on replacing or purchasing a car. Hopefully you’ll find a perfect match like I did!

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Source: clark
Should you buy a car through a credit union?