Autodecide

Shopping For the Best Auto Loans at Credit Unions

Before going to a dealership, make sure you get pre-approved for your car loan. Here’s what consumer advocate Clark Howard recommends:
Clark advises anybody seeking an auto loan to get pre-qualified at a credit union, which will offer lower rates than a bank.
But don’t just go to the first credit union you see. You can qualify to join many credit unions. By doing some searching, you can find the credit union which will offer you the best deal on a car loan. This post is intended to make this search easy.

Finding a Credit Union with Competitive Auto Loan Rates

A good resource to find all of your local credit unions is this Credit Union Locator. This will give you all of the credit unions near where you live. It’ll also give you the web address of each credit union. Most credit unions will list the auto loan rates on their website.
Another good resource is at BankingMyway which has a searchable database of local bank and credit union auto loan rates. If you use this, I bet you’ll notice that the best rates are from credit unions.

Joining a Credit Union
If the credit union is offering competitive rates, you’ll next want to check to see if you are eligible to join the credit union. Unlike banks, credit unions are only allowed to offer membership to certain groups or fields of membership. These can be based on employers, association memberships or where you live. Most credit union websites will include a page which describes their field of membership.
If you are eligible to join a credit union, membership typically requires a minimum balance in the credit union’s savings account (typically called a share account). This balance must be maintained to keep your credit union membership. Typically this amount ranges from $5 to $25.

Credit Unions Outside Your Area

You can be eligible to join many credit unions that may not have branches in your city. This gives you more options at finding the best rate. Some of these credit unions allow you to join online or by mail. You still have to be in their field of membership to be eligible to join. But this can often be easier than you might think. You can often qualify if you’re a member of some association that anyone can join. The association typically requires a small membership fee, but you don’t have to maintain the association membership to maintain your credit union membership.

How to Join Pentagon Federal Credit Union

A good example of this type of credit union is Pentagon Federal Credit Union. If you don’t qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (NMFA). Please refer to Pentagon FCU’s How to Join overview page for details. Joining NMFA and Pentagon FCU can be done at the same time all online. The yearly membership for NMFA is $20, but your membership in the association does not need to be maintained to continue as a Pentagon FCU member (although the NMFA is a good association to support).

Car Loan Deals at Pentagon FCU

Pentagon FCU has a history of offering great . As of April 2008, the credit union has an especially good deal with a rate of 4.25% APR. This rate applies to terms from 12 to 72 months for new cars and from 12 to 60 months for used cars. This rate also applies to refinancing an auto loan.
This is an internet-only rate. Pentagon FCU sends you a blank check for the auto purchase within 2 days with limits you set when you do the online application. There have been reports that Pentagon FCU is a conservative lender who’ll typically require a decent credit score for you to qualify.
In addition to car loans, there are other reasons why you may want to join Pentagon FCU. They offer a great that pays 5% cash back for gas purchases when you pay at the pump, 2% for supermarket purchases and 1.25% on all other purchases. Pentagon FCU also offers good deals on mortgages, HELOCs and CDs.
Pentagon FCU is just one of many credit unions which provide easy nationwide membership. I’ve covered other credit unions in previous posts, which have also had great auto loan rates. In the months ahead, I’ll continue to post on more of these.

Beware of Auto Identity Theft When Buying a Used Car

Four years after you buy a used car, the police confiscate it and you never get it back. This actually happened to a lady in South Florida. Her story is in this Sun Sentinel article. She had a sporty gray Mitsubishi Eclipse which she bought at a large car dealership. Both she and the dealership weren’t aware that it was a stolen car that had its vehicle identification number (VIN) replaced with another car’s VIN.
According to the article, cloning operations often target high-end models and their business is booming. Consumers often lose their cars when such fraud is found because the vehicles are considered stolen property.
Vehicle Cloning Prevention Tips
As the article describes, the thieves can be sophisticated and can be difficult to detect. They forge, duplicate or alter titles so VINs placed on the clone matches the documents. There are some steps you can take to reduce the chance of this happening to you. Here are some vehicle cloning prevention tips mentioned by the National Insurance Crime Bureau:

Check the vehicle’s VIN with appropriate government agencies and your state bureau of motor vehicles.
Analyze the ownership pattern for any new or late model vehicle with no lien holder.
Trust your instincts: If a used vehicle deal sounds too good to be true, walk away.
Have a private company conduct a vehicle history search.

Obtaining a Vehicle’s History Report

A vehicle history search can be done on the internet. Two choices are AutoCheck from Experian and CARFAX. Both searches cost around $25. The CARFAX tool is nice in that you can get a free and immediate summary of the car’s year, make, model and a few other car details by just entering the car’s VIN. I tried this out with my car and it worked perfectly. You’re then given the choice to purchase the vehicle event history.

Buying that “New” car — payments or cash

Reading through a bunch of personal finance magazines recently and talking with some car dealers, it turns out that consumers have started to extend loan rates for those flashy, fancy new cars and trucks they are buying. New car loan rates have now extended to 60 months and some credit unions are even offering loans up to 72 months! This seems very strange to me. Why? Because 72 months is 6 years! Are you really going to own that vehicle in 6 years ???
However, there appears to be some mitigating factors for those new long loan rates — cars simply last longer. Which should be also a sign that you can expect to drive a car for more than 6 years and not worry about significant repairs in that time period. This is good news for all of us consumers (as long as we abstract ourselves from the cost of financing a loan at an average currently of about 6.2%)
Think about this — approximately the same financed amount could mean significant interest costs over the increased number of years. For example, if you would like to buy that nice new mid-size sedan with a price tag of about US$35K, put $5K down and finance $30K the difference between financing over 3 years vs. financing over 7 years could mean additional interest of approximately US$5K.

Car Loan Deals at Credit Unions

Before you go to the dealership to buy a car, you should take the advice of consumer advocate Clark Howard::
Clark has talked for several years about the tremendous advantage of getting pre-approved for your car loan from a credit union. They offer deals that are substantially better than what you’ll get from a bank.
To join a credit union, you have to be eligible and be in their field of membership. Each credit union’s field of membership is different. It can be based on where you live, where you work or what organization you are a member of. There’s a little known fact that there are several credit unions you can join via a membership into an organization open to everyone. There’s typically a small membership fee into these organization, but you only have to pay this one time. Once you’re a credit union member, you’re a member for life. You can join these organizations and these credit unions by mail and in many cases online. So you don’t have to live close to one. The Bank Deals blog has a list of several credit unions open to everyone.

Car Loan Deals

As Clark Howard mentioned, you’ll often find great deals at credit unions for car loans. One credit union in particular that has consistently offered great loan deals is Pentagon Federal Credit Union. This is one of those credit unions anyone can join. Currently, they’re offering auto loans with rates as low as 5.74% APR for new cars with terms from 36 to 72 months. For used cars the rates are as low as 6.04% APR for terms from 36 months to 60 months.
An even better deal is currently at Agriculture Federal Credit Union which is another credit union open to all. They are now having an auto loan special with rates as low as 4.99% APR for new cars, trucks and vans with terms between 24 months and 60 months. For used vehicles, the rates are as low as 5.49% APR for terms between 24 and 60 months. These are fixed rates. You can even get a $50 gas card.
The above deals are much better than what’s listed at Bankrate.com.

New Car Deals – How to find them

So you have decided to look for a new car. Well, this could be an exciting time and at the same time, it could be a stressful time The usual questions (besides which car to buy) are centered around the notion of whether or not you are getting a good deal.
What makes a good deal? Usually that would be the notion of being able to get as close as possible to the dealer cost for the vehicle. For those who are either not experienced with reading the window sticker on a new car, the dealer will usually show you Window Sticker Price. That price is comprised of
the MSRP – the manufacturer suggested retail price.
Pricing for the Optional Equipment
Any markups for special pricing adjustments if the vehicle is in limitted supply
plus of course the desination charge (transportation costs)
Well that Window Sticker Price might seem reasonable to you, but in general it will not show you all the incentives the dealer might have from the actual manufacturer. The dealer has paid essentially significantly lower price for the vehicle (the dealer cost) plus they have incentives from the manufacturers via rebates and potential other cash back programs.
So all in all make sure you ask for all these items so you can make an informed decision when deciding on your final offer for the given vehicle. Make sure to find out if there are any rebates (recent college graduate, or other types), and try to find out ahead of time what the dealer cost might be on the vehicle of interest.

Day to day decision making

We all making decisions every day. Sometimes they are big ones, sometimes they are simple ones. What would you think are the decisions you make? Well, lets see some:
My vehicle is in a need of repair;Should I repair it? Will I face other repairs soon? Or should I just think about replacing the vehicle ?
Should I buy or lease ?
What vehicle should I buy ?
I am looking to buy a new TV. But what should the TV type be? Flat panel or a CRT one?
My mobile phone plan is close to expiration. What should I look for in a new plan
These are some examples. In reality we face decision making every day. In some cases we feel that making the decision is easy, while in other cases it is a mind boggling task;. And to make things even more complicated, in some cases we have to make a decision while taking into account the opinions and perspecitves of more than just one person
So, by now you are probably convinced that life is quite complex. On top of that we want to make the best decisions possible, but yet, we do not want to spend days or months worried whether we are making the right one.
This is where we could really benefit from some tools / help aids that can make our life easier. Academia has spent several decades developing mathematical models and theories to assist decision making, but we need a set of tools that simplify the process rather than adding more complexity.
So, how would you feel about a set of tools that will help you make decisions in a fast, efficient, well informed manner, and with a good balance with the people you care about
Let us know what you think.
In the mean time we are working on some tools already. Stay tuned — we will make those available shortly.