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Auto Loan, Life Events

The First 3 Things You Should Do if You Get in a Car Accident

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

3 Steps to Take After You Caused a Car Accident

If you’re a driver, it is likely that over your lifetime you will be in a car accident. Hopefully, that accident only involves injuries to your car and not to you.

The next time you find yourself in a car accident and you’re the offender, follow the tips below.

1. Evaluate the accident scene

Immediately after an accident you should evaluate the accident scene. This means you should pull over right away and call the police. Put your hazard lights on and keep in mind your environment. Be very careful if cars are driving around you that you’re safely to the side. Make sure you’re okay and everyone you’re with is okay. Take note of any injuries that you or anyone else has.

After you’re safe, call the police. Whether the accident is big or small, it’s important that you call the police to the scene right away so there’s a record of the accident.

Approach the person you hit and exchange contact information with him. Get his name, address, and phone number. If you can see his identification, that’s even better, because you can confirm his identity. If there are any witnesses at the scene, you should also get their contact information, too. The more information you have, the better.  This may be done by you directly, or it may be done by the police. If it is done by the police, make sure that you get the information from the police officer, so you have record of it personally.

Take photos of the accident scene, including your vehicle, the vehicle of the person you hit, and any additional photos that could be relevant (like photos of the entire scene to show the exact space and geography of where the accident took place). If shooting a video is possible, consider recording the scene. The more documentation you have, the less opportunity there is for dispute over the scene itself.

2. Watch what you say (don’t admit fault)

While you are evaluating the accident scene and speaking with anyone other than the police, do not talk about how the accident happened or who was at fault. Do not admit that you were at fault and do not make monetary offers to the person you hit. It is tempting to apologize during a highly stressful situation, like a car accident, but it’s to your benefit that you do not say sorry or that it was your fault. Doing this could put you at risk for additional legal liability. Even if you think or know you are at fault, do not admit it.

It’s equally as important not to discuss how you’re feeling. If you say you are completely fine and later you discover you’re injured, it will be harder to prove with statements that you made saying you weren’t injured after the accident. The bottom line is that you should be very careful with what you say at the scene of the accident. Less is more.

When you are speaking with the police, be very clear about what you know happened. If you don’t remember or can’t recall exactly, then say that (don’t try to fill in the blanks).

3. Complete follow up actions after the accident

After you leave the accident scene there are follow up actions you need to take. If you are injured, seek medical attention right away. Even if you don’t start to feel pain until the following day, or some other time after the accident, make sure you get the proper attention you need.

Report the accident to your auto insurance company

Aside from the medical attention, you need to contact your auto insurance company immediately after the car accident and report the accident. As the person who caused the accident, it is your responsibility to report the accident to your insurer. But note that even if the police report puts you at fault, it is your insurance company that will determine whether you’re at fault for insurance purposes. If your insurance company does determine it was your fault, then it is likely that your insurance will be the source of your claim and the victim’s claim. However, your insurance company may fight with the victim’s insurance company or it may decide not to cover the victim’s claims if they are minimal and it’s unclear if you’re at fault. It’s not obvious what will happen because every situation is different. If the insurance company decides you’re at fault, then in most states, your insurance company will handle your medical claims and car repair claims in addition to the victim’s claims.

Keep your own paper trail

Get the name of the agent who is handling your call and who will handle your insurance claim. If you’re given a claim number, make sure to write that down and keep it on file. The more information you document, the better.

Check-in before getting repairs done

Discuss getting your car repaired with your insurance agent. Sometimes, insurers require you to get their permission before getting your car fixed. Be sure to get accurate information from the insurer and note that you can take your car where you want to be repaired – you don’t have to follow the recommendation of the insurance company as to where you take your car. When you get your car fixed, document your repairs and keep your receipts.

Decide if you need to meet with a lawyer

Your final course of action after an accident is to determine whether to pursue legal action or if you need to legally defend yourself based on the victim’s decision. You can meet with an attorney, typically for a consultation at no fee or a very small fee, so do not be deterred from an initial meeting due to fear that it will be expensive. You don’t have to commit to pursuing legal action until after you’ve met with an attorney. So, if you’re unsure about whether to move forward legally, you’re not risking much by meeting with an attorney. The attorney will also be able to advice you on whether your situation is worth pursuing legally.

A Final Note

State law governs the specific rules that will apply to you after you’re in a car accident. Check your state’s laws to determine the specific course of action you need to take. Your insurer should be able to help you with this.

Steps to take if you’re the victim of a car accident. 

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Auto Loan, Reviews

Review: Chase Auto Loan for New and Used Cars

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Car_lg

Online auto loans are quickly becoming the most stress-free and uncomplicated way to finance a new car or refinance a loan you already have. With streamlined approaches to loan approval and the ability to walk into a dealership knowing your exact budget and interest rate with loan preapproval, car shopping is becoming easier on your wallet and your time.

The Offer

The information related to Chase Auto Loans has been collected by MagnifyMoney and has not been reviewed or provided by the bank.

Auto loans from Chase range from 48 to 72 months and interest rates can vary by state, but APRs can be as low as 1.99%.

New car: 1.99%
Used Car: 2.09%
Refinance: 2.16%

Chase can loan $7,500 - $100,000 and provides APR discounts up to 0.50% for Chase checking account customers.

How To Apply

An application for a Chase auto loan can be made online or at a local branch, even if you don’t know which vehicle you want to purchase yet. If you don’t know what car you want to purchase, fill out what information you can. Chase will collect vehicle information later.

In order to apply you will need to provide your:

  • Name
  • Social Security Number
  • Address
  • Date of Birth
  • Phone Number
  • Email Address
  • Employment & Income information
  • Loan Amount and Term
  • Vehicle information (make, model, year, current mileage, VIN)

The Fine Print

At the time of this article, APRs are as low as 1.99% and are based upon creditworthiness.

Chase offers APR discounts up to 0.50% for being a Chase customer and enrolling in automatic payments. If you have a personal Chase checking account your APR will be discounted 0.25%. You will receive an additional 0.25% APR reduction if you enroll in automatic payments and continue to have your monthly auto loan payments automatically deducted from your Chase checking account.

Chase also requires the following Loan-to-Value ratios with an excellent credit history.

  • 80% for new vehicles
  • 95% for used vehicles

Chase offers loans for new and used autos, but with a few restrictions. Used cars cannot be more than 5 years older than the current model year and have no more than 75,000 miles. The vehicle cannot have been sold for scrap or declared a total loss. Vehicle cannot be used for commercial purposes, such as a limousine or taxicab.

Pros

  • Loans from $7,500 - $100,000
  • Finances new and used autos
  • APRs as low as 1.99% (before Chase customer rate discount)
  • Terms from 48 to 72 months
  • APR discounts up to 0.50%

Cons

  • Lowest term is 48 months
  • Rates vary by zip code
  • No online pre approval

How It Stacks Up

[Disclosure: LendingTree is the parent company of MagnifyMoney.]On LendingTree, there are hundreds of lenders who are ready to compete for your business. You simply fill out a short online form and can see real interest rates and approval information at once. Keep in mind, some lenders will do a hard pull on your credit and that this is normal within the auto lending space. Multiple hard pulls only count as one pull, so it is smart to have all your hard pulls done at once, which LendingTree can do for you.

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LightStream, a division of SunTrust Bank, provides a competitive option with APRs starting at 3.09%, with autopay, terms ranging from 24 to 84 months, and financing of $5,000 - $100,000.

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on LightStream’s secure website

If you’re a member of the military, or have a family member who is, consider Navy Federal Credit Union for shorter terms and lower APRs. Its APRs start at 2.59%, and terms can be as short as 12 months or as long as 96 months. Navy Federal Credit Union can finance $250 - $500,000.

Shop Around First

Online auto loans are becoming increasingly competitive, which is good for you, the consumer. The best way to ensure you get the best rate for your next auto purchase is to shop around for your best rate in the 30 days prior to car shopping. Don’t worry about your credit score as you shop around, because all inquiries within a 30-day period count as one.

Then when you get to the dealership, negotiate the price of your car before letting the dealership know that you have already been approved for financing. Then, once a price agreement has been reached, show the dealership your financing and ask them to beat it.

Often, the manufacturer offers 0% financing, which you may be eligible for. If that is the case, you just negotiated a great deal on a new car and saved hundreds or thousands in interest.

Compare Your Auto Loan Options Here

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at gretchen@magnifymoney.com

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Auto Loan

11 Things to Know Before You Lease a Car

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Nearly one quarter of new cars in America are sold under lease agreement, and low monthly payments entice buyers who want to drive new cars, but don’t want to deal with a large cash outlay.

Lessees don’t build equity in their vehicle, but for the right person, a lease can be a good option. These are things you need to know before you consider a lease.

1. The best way to think about a lease

It’s best to think of a lease as a pay for use contract. A lease allows you to pay for the depreciation you put onto a vehicle at a reasonable interest rate. You get to drive and depreciate a vehicle for a certain period of time then you can walk away.

Due to higher markups, higher interest rates and additional fees, leasing tends to be an unfavorable financing mechanism, but if you don’t care about owning the car, a lease may be a good option for you.

As a lessee, you will drive the car during its most rapid depreciation phase, so in the long run, continuously leasing a vehicle is the most expensive way to drive, but if you always want to drive a new car, leasing can be a low hassle way to make that happen.

2. Leasing affects your credit score

Taking on a lease affects your credit the same way that taking on a car loan affects your credit. Applying for a lease triggers a credit inquiry on your report, which has a small adverse effect on your credit score. Taking on a lease increases credit utilization which also adversely affects your credit score. Over time your credit utilization will fall, and timely payment history will cause your score to increase again.

Leases are considered installment loans, and having a high utilization rate on installment loans does not have as much of an adverse effect on your credit score as having high utilization on credit cards or other forms of revolving credit. As with any form of credit, late or skipped lease payments drag down your score

Further Reading: Credit Score Guide

3. Leasing terminology

Manufacturers and salespeople shroud leasing in complex jargon. To understand the terms of your lease, these are the definitions you need to know.

  • Capitalized Cost: The price of the vehicle. This could be MSRP (Manufacturer’s Suggested Retail Price), or it could be reduced based on your negotiations.
  • Capital Cost Reduction: This is a down payment. The most favorable leases (for those who don’t intend to purchase at the end of the lease) should not include a capital cost reduction unless it’s an incentive.
  • Residual Value: This is the estimated value of the car at the end of the lease. The higher this price is relative to the capitalized cost, the more favorable it is to lease a car. Cars.com keeps a database of residual values on file that you can use to understand if you’re getting a fair residual value.
  • Factor, Money Factor or Rate: This is the interest rate of your loan, but it’s not expressed as an annual percentage rate. The number expressed needs to be multiplied by 2.4 to get to an APR. For example a 1.35 money factor is a 3.24% interest rate. LeaseHackr.com keeps an up to date list of “official” factors (column entitled MF) that you can use in negotiations. Interest rates on leases range from 2-3 times as high as interest rates on traditional car loans, but it is possible to negotiate this rate.

4. You can negotiate a lease

Unlike car loans, leases come from car manufacturers rather than banks. However, this doesn’t mean that it’s impossible to negotiate a lease. Anyone who intends to lease should try to drive down the capitalized cost, and people with good credit should also look to reduce or even eliminate the money factor. Small fees like documents fees, tire fees and more can be waived completely if you take the time to negotiate.

Even if a dealership advertises a “Manufacturer’s Leasing Special”, you should negotiate the terms of the lease. Salespeople depend on getting you to drive away in a new car, so consumers hold upper hand in negotiations.

5. No money down

One advantage of leasing a vehicle is that it shifts depreciation risk from the customer to the manufacturer. A down payment (or a capital cost reduction) shifts the risk back onto the customer. In a lease, a down payment is a form of pre-payment. If you terminate the lease before the end of the lease period (if your car is totaled or stolen), you lose the benefit that the down payment purchased. Putting no money down is an important strategy for keeping the lease in the lessee’s favor.

6. Extra insurance costs

Leasing yields lower monthly payments compared to buying using traditional financing, but some of the monthly cash flow advantage is lost by increased insurance costs. To protect themselves financially, lessees should purchase “Gap Insurance” in addition to traditional car insurance.

Gap insurance covers the difference between the actual cash value and the amount owed on a lease. As soon as a lessee drives the car off the lot, the car is worth less than the lessee owes on their lease. If a car is totaled or stolen during a lease period, you need to be able to buyout the lease early, and gap insurance allows you to do that. Gap insurance should be purchased through a traditional insurer, and adds anywhere from 3-10% to the traditional cost of insurance.

7. Fees, fees, fees

Every lessee runs into at least three substantial fees during the course of their lease. The first fee is an acquisition fee (alternatively called a financing fee). This fee is not a down payment, but it runs anywhere from $500 for basic compact cars to nearly $1,000 for luxury vehicles.

Dealerships also charge a $300-$900 Delivery Charge which covers the cost of the vehicle being delivered to the dealership lot. Lessees need to be prepared to pay this fee upfront, but some companies try to sneak a second delivery fee into the contracts. The second delivery fee can be negotiated to zero.

The last fee every lessee will encounter is either a disposition fee or a purchase option fee. These fees run between $300-$400 depending on which option you choose. When a lease ends, you will pay a fee to the dealership unless you negotiate it away at the outset.

In addition to these larger fees, many lessees will run into mileage overage fees which range from $.15 per mile for basic vehicles to $.30 for luxury vehicles. Most people drive more than their lease allows, and these extra miles cause additional depreciation on the vehicle. Since a lease is a “pay for what you use agreement”, it’s fair to pay for those extra miles. Of course you can avoid overage fees by limiting the amount you drive or by purchasing the car at the end of the lease.

You should negotiate smaller fees like advertising fees, tire fees, document fees, vehicle preparation fees down to zero.

8. Repairs required

Lessees bear the financial burden of repairs and maintenance on their leased vehicles. Some dealerships offer free tire rotation and oil changes, but the lessee has to pay for other maintenance. New cars shouldn’t require much maintenance, but accidents, chipped paint and broken windshields need to be paid for, and longer lessees may need to buy new tires while they own the vehicles

9. Exit options

Turning in a leased vehicle early is akin to defaulting on a car loan. Your credit will take a hit, and you will still owe money. However, it is possible to “sublet” your car through websites like SwapALease and LeaseTrader.

If your lease is about to end, you’ll have to decide whether or not to purchase the car or return it. If you want to buy the vehicle, you may be able to negotiate the buyout price. If you have the cash on hand to pay for the vehicle, and the purchase price is lower than an equivalent used car, you can purchase the vehicle outright and sell it for instant equity. If you have to obtain financing, the additional fees may erase any favorable pricing you obtained.

If the vehicle is worth less than the purchase price at the end of your lease, you should probably walk away from the vehicle or attempt some strong negotiations. Of course, the beauty of a lease is that the termination of the lease means that you can hand the keys back to the dealer and move on. 

10. Consider leasing if…

Anyone with midterm vehicle needs (only needing a vehicle for a few years) may find that a lease is a good value and a good fit for their lifestyle. Likewise, anyone who loves driving new cars and doesn’t mind having a monthly payment may enjoy leasing long term.

Continuously leasing vehicles is more expensive than “driving a vehicle into the ground,” but many people don’t mind that they get what they pay for.  People who enjoy driving newer, fancier cars may find that leasing can be a reasonable lifestyle, especially if they can easily afford the payment.

11. Avoid leasing if… 

Avoid leasing if you’re trying to drive as inexpensively as possible. The low monthly payments are enticing, but leasing is the most expensive way to drive in the long run. Leasing has high interest rates and high fees. If you can’t afford the monthly payments associated with owning a new car, consider buying used or choosing a basic model. Both of these methods end up being cheaper than leasing.

If you drive a lot, or if you frequently drive in poor conditions, you’re a bad candidate for leasing. The additional depreciation may mean that you’re left paying extra fees at the end of your lease. Additionally, anyone seeking to own a vehicle should pursue paying cash or taking out a traditional loan rather than leasing.

If you decide to purchase your vehicle instead of leasing it, it is best practice to get pre-approved for your auto loan before heading over to the dealership. [Disclosure: LendingTree is the parent company of MagnifyMoney.]We recommend starting with LendingTree. There are hundreds of lenders on this platform. After filling out your application, you will be able to see real interest rates and approval information at once.

Keep in mind, some lenders will do a hard pull on your credit and this is normal within the auto lending space. Multiple hard pulls only count as one pull, so it is smart to have all your hard pulls done at once, which LendingTree’s tool can do for you.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah here

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Auto Loan, News

Should You Ever Lease a Car? Here’s What You Need to Know

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Lease a Car

If you’re in the market for a new car, you may be wondering whether it would be better for you to lease or outright buy new your set of wheels. While there are many factors to consider, we’ll put it out there upfront that most experts say that it makes more long-term financial sense to actually buy and keep a new car than it is to lease one.

Having said that, here are some of the factors that should go into your decision, either way.

1.What’s your monthly budget?

While it’s true that you may be able to lease a car for less money than it would cost for you to outright buy one, what you’re essentially doing in the case of leasing a car is renting it and paying interest on something you’ll eventually need to return. That means that once your lease is up, you’ll be left with the same decision you’re faced with right now — what’s the best option for a new car?

Also keep in mind that breaking a lease — for whatever reason — often comes with early termination fees and strict payback policies (meaning you could still be on the hook for the money that’s left on your lease). You might be able to work with your dealer on some of these things, but in most cases, if you want to break a lease early, you’ll be responsible for the remaining amount left on the lease, as well as the termination fee (which could be a couple hundred dollars).

2. Check for additional upfront fees

While your overall monthly fee to drive a car on a lease will may be cheaper than auto loan payments, there are additional fees to be on the lookout for before signing a contract. For example, often customers are asked to shell out hundreds or even thousands up front in order to get the best deals on leases. This extra money is usually put towards paying down a portion of the lease, but if something were to happen to the car early on (like an accident), insurance companies often agree to pay back the value of the car, while the amount that you paid upfront would most likely be forfeited.

3. Consider any mileage limitations

The problem with leasing instead of buying is that you don’t outright own your car, so there will still be rules — set by your leasing agent — to follow. Take mileage limits, for example. Most leases have limits on the number of miles you can drive while leasing a car (usually between 10,000 and 15,000 miles per year), and customers are penalized when they drive over that set amount. At a penalty that could be around 20-to-25-cents-per-mile, those fees can really start to add up, depending on how much you drive. Always do a little math before signing on for a lease to determine if you think your estimated mileage will be within what’s offered with your lease.

4. Get on the same page about “normal” wear and tear

Since you’ll be returning this car after your lease it up, most leasing companies want to ensure that they get cars back that are within a certain realm of wear and tear. If you return a car that the company deems above average use, you’ll likely be charged extra for it. To avoid that problem, make sure you chat with the leasing agent in depth about what’s expected in terms of the condition of the car when you return it, and take photos for back up if needed.

Remember that in some cases these stipulations will be negotiable, but again, you’ll likely have to pay more for any modifications or upgrades to the typical lease that you want to make.

While leasing a car may seem like a viable option right now — and it could be — it’s worth putting in a lot of thought about the type of driver you are, how much driving you do and how much flexibility you want with your car before going into a lease. If you can’t afford a new car and a lease doesn’t feel right to you either, you can always consider buying a used model. Check out this piece for six of the best auto loans for buying a used car.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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Auto Loan, News

Everything You Need to Know About Car Insurance

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Car_lg

Car insurance can be a tricky thing. From funky language like personal injury protection coverage, underwriting and VIN numbers to pricing out quotes and options, it seems like a lot of background education is needed before even attempting to find the policy that’s right for you.

To help you get answers to some of the most vexing questions you may have about the process of shopping around for car insurance, we spoke with Jeff Medina, director of sales at The Zebra, a car insurance comparison site. When it comes to the number one mistake people make with car insurance, Medina says not shopping around to find both an insurance company and premium to fit both their needs and their pocket book was top of the list.

So what do you need to know about shopping for car insurance? Here is Medina’s 5-step process to finding the company that will work best for you.

Step 1: Understand your coverage options

Before getting down to actually looking at different companies, it’s a good idea to get a grasp on the differences and definitions of insurance for things like liability, comprehensive and collision, personal injury protection and medical payments, uninsured/underinsured motorists and comprehensive. Check out The Zebra’s No-Frills Insurance Terms Glossary to get started.

Step 2: Consider the deductible

When it comes to your insurance, what you’re paying each month out-of-pocket for the policy is important, of course, but you’ll also need to pay attention to your deductible, or the amount of money you’re required to pay in order for your car insurance company to take care of the rest of a claim. Think about that number and what you can afford to pay when taking different companies into consideration.

Step 3: Know what affects your rates

Your driving history is a big part of this, since your behaviors are used to assess what risk the insurance companies are taking on. “Additionally, most insurance companies use a variety of factors like age, gender, ZIP code, vehicle make and model, vehicle use, prior insurance history, marital status and credit score to calculate your premium,” says Medina. Since insurance is regulated by state, though, these factors can vary, so look into yours.

Step 4: Be aware of discounts

Popular discounts include those for multi-vehicle policies, bundling with home or renter’s insurance, good students and safety features. “Research discounts and don’t hesitate to ask an agent what you qualify for,” says Medina. “Some insurance companies also offer usage-based insurance (UBI), which base your insurance on your driving habits and mileage. This is especially good for those safe drivers that rarely use their vehicles.”

Step 5: Choose a reliable company that fits your unique needs and get the best price by comparing

If you’ve already started the process of shopping around for car insurance, you may have been overwhelmed by the sheer quantity of car insurance companies available. “Each specializes in different types of drivers and coverage, so it’s important to compare car insurance companies to find the best match for you,” said Medina. “You can evaluate each insurer’s financial reliability (will they pay your claims?), as well as customer service and business practices to ensure you get the best experience.” Good places to look at these factors for different companies include A.M. Best, J.D. Power and the Better Business Bureau.

Armed with that knowledge, you should be able to march confidently into your car insurance search, positive that you’ll find the company that will work best for your needs. In the meantime though, if you’re currently insured and shopping around, don’t cancel your old insurance until you pick up your new policy. “Having any lapse in coverage can have a negative impact on your future insurance premium,” says Medina.

For more on cars, check out this piece about four ways to make owning a car more affordable in 2016, and this one about the six best auto loans for buying a used car.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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Auto Loan, News

4 Ways to Make Owning a Car More Affordable in 2016

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Car_lg

Ah, to own a car. Let’s be honest — public transportation has its draws (the fact that we don’t have to worry about doing the actual driving, the environment, and all of that), but when it comes to convenience, nothing can beat your own set of wheels.

But can you afford your own set of wheels? This year we at MagnifyMoney want to make things as easy for you as possible, so we’ll walk you through the steps you should take prior to walking on that car lot to ensure that you’ll be driving away with the car that’s right (and affordable) for you.

1. Start with your budget

As with most financial decisions in life, the choice to buy a car should start with your current budget. Do you have leftover cash each month — or room to cut back on current expenses — so that you can make car payments each month? Starting with your monthly income will help you determine whether or not you can afford taking out a loan for a shiny new car (or even for a used one), or if buying something pre-owned and less expensive is the way to go. And remember — buying the car is just your first step. After you own it you’ll be in charge of paying for repairs, gas, insurance and more, all things you’ll need to factor into your current budget, as well.

If you need a little more help deciding whether an auto loan is right for you, check out this piece about the two times it makes financial sense to secure an auto loan.

2. Figure out your financing

If you’ll be going with a used car this year and paying for it in cash, in full, then you may need to figure out a timeline for when you’d like to purchase the car and try to break up your monthly savings to meet that monetary goal in time. If you’ll be purchasing a new car with a loan, though, you’ll want to do some shopping around. As with most loans, the better your credit score, the better your financing options will be. Online auto loans are a quick and popular way to get financing for your new car, but you’ll want to shop around. For example, check out this piece about the five best auto loans for a new car, or this one for the best loans for a used car. (P.S. You’ll also want to avoid the sub-prime auto trap at all costs … we can help you.)

Once you’ve figured out financing and know how much car you actually can afford, it’s time to head into step 3, the fun step …

3. Research your car

Are you interested in only American cars? Do you need all-wheel drive? What about those fancy add-ons like a sunroof, heated seats or satellite capabilities — how important are they to you? And safety reports — that’s got to factor in too, right? Start with the Kelley Blue Book to price out some of the vehicles you’re interested in, and then ask around for what people who have cars you’re interested in paid. A little research ahead of time will really help you when it comes time to head into step 4.

4. Negotiate like a pro

Once you’ve narrowed your list to a few car options and have a general idea of what you can (and should) pay, it’s time to shop. It should come as no surprise to you that negotiation is the name of the game when it comes to purchasing a car. Start with the fact that you’ve done your research and know how much the car is actually worth, be polite and don’t be afraid to walk away at first and come back if need be. Following up when the salesman is unlikely to make another sale for the day (and therefore would really appreciate yours!) is also a good idea, like on a weekend right before closing. If you can, you should also try purchasing your car at the end of the month or even the end of the year, when dealers are trying to move as much inventory as possible to make room for their new stock and are more likely to cut you a deal to do so. 

A lot goes into the decision of buying a new car, and a little research can really help a lot. If you’re still unsure of what your next move should be, check out this piece for eight more tips on how to score a car that you can afford and that you will love.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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Auto Loan, Reviews

Review: Wells Fargo Auto Loan

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Wells Fargo Auto Loan

Updated November 16, 2015

Shopping for a new (or new to you) car can be an all-consuming process. Between reviewing your budget and determining what payment you can afford, obtaining financing at the absolute best rate, and then actually shopping for the car your family needs, you can be looking at a stressful process.

Online banks and credit unions are quickly becoming the most competitive when it comes to auto financing, but big banks like Wells Fargo is still looking for your business.

The Offer

Wells Fargo auto loan provides flexible financing for new and used vehicles, as well as lease buyouts. Its rates range from 3.88% to 10.51%, and it loans up to $100,000. Auto loan terms with Wells Fargo start at 12 months and top out at 72 months, but it does not allow online approval.

How To Apply

In order to apply for a Wells Fargo auto loan, you should be prepared with the following information:

  • Personal Information: Your Social Security number, address, any previous addresses, mortgage amount and information or rent payments.
  • Income Information: Your gross income, current and previous employment history, employment status.
  • Current Vehicle Information: The VIN, year, make, model, and mileage of the car.

To make sure you have all of the necessary information, use Wells Fargo’s Loan Application Checklist

The actual online application is fairly simple, and you will receive an answer as well as your rate in 5 to 10 minutes. If you do not wish to complete your application online, you can visit a Wells Fargo branch and discuss your application there with an Auto Finance Specialist.

If you are approved for the loan, you will receive your funds within a few days.

The Fine Print

Auto loan rates with Wells Fargo depend on creditworthiness, type of purchase (new or used), term, and the amount financed. The following are the starting APRs for different types of purchase:

  • Refinance: 4.62%
  • New Purchase From Dealer: 3.88%
  • Used Purchase From Dealer: 4.14%
  • Used Purchase From a Private Party: 6.84%
  • Lease Buyout: 4.34%

The starting APRs listed above assume a loan amount greater than $22,000 and that is less than 85% of the car’s value. This means that if you have the credit history to qualify for the starting rates, you may have to have a down payment.

You can choose to finance 100% of the vehicle, and not need to provide a down payment, but your rate will be higher.

The starting APRs also include a 0.25% relationship discount. To qualify for the relationship discount, you must maintain a qualifying Wells Fargo consumer checking account and make automatic payments from a Wells Fargo deposit account. You can only receive one relationship discount per loan, and auto loans where the dealer is the lender to not qualify. If you choose to cancel automatic payments or your qualifying checking account, your relationship discount will be cancelled.

Auto loans from Wells Fargo come with a $99 origination fee, which is financed with the loan and reflected in the APR. There is no need to pay this fee out of pocket.

The minimum loan amount Wells Fargo will finance is $5,000. Wells Fargo has the ability to finance up to $100,000 for an auto loan, but the maximum amount you are approved for will be determined when you apply. Terms for new vehicles are as long as 72 months, but for vehicles 7 years or older, the maximum term is 48 months.

Wells Fargo finances most vehicles with the exception of commercial vehicles, salvage vehicles, or conversion vans. Titles cannot be registered to a business.

Also worth noting is that Wells Fargo does not finance auto loans in Louisiana.

Pros

  • Rates From 3.88%
  • Terms of 12 to 72 months
  • Loans from $5,000 to $100,000
  • 25% Relationship Discount
  • Online application approval or denial in 5 to 10 minutes

Cons

  • Rates max out at 10.51%
  • $99 Origination Fee
  • No online pre-approval
  • Not available in Louisiana
  • No commercial or salvage vehicles
  • No conversion vans
  • 48 months maximum term for vehicles 7 years and older
  • Rate is unknown until you apply

Wells Fargo Bank

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Other Auto Loan Options

Wells Fargo’s rates are easily beat by many other auto loan lenders, regardless of whether you’re buying new, used, or refinancing.

LightStream

LightStream offers similar loan terms, 24 to 84 months, and will finance $5,000 - $100,000 with rates starting at 3.09% with autopay. Unlike Wells Fargo, LightStream charges no origination fees.

LightStream

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PenFed

For a less complicated loan experience with lower rates and fewer fees, you could also consider PenFed Credit Union. You have to become a member, but anyone can gain membership in PenFed Credit Union with a one-time donation to a PenFed selected charity. It offers rates from 2.49% to 4.49%, terms from 36 to 84 months, and will loan $500 - $100,000. It charges no origination fee, but does not provide the option for online pre-approval.

PenFed Credit Union

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A Good Option in Select Cases

Wells Fargo may be a good option for an auto loan if you prefer to buy used from a private party, need a lease buyout, or already have a relationship with the bank. However, in most cases you will be better off looking elsewhere. Between the high interest rates, complicated terms, fees that few other lenders charge, and no ability to get pre-approval online, an auto loan from Wells Fargo may be more trouble than it’s worth.

Find other auto loan options here.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Gretchen Lindow
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Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at gretchen@magnifymoney.com

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Auto Loan, Reviews

Review: Bank of America Auto Loan

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Bank of America Auto Loan

Shopping for a new or used car has become a complicated experience. There are so many makes and models to choose from, so many dealers to purchase from, and a range of prices that makes it hard to see if whether or not you’re getting the best deal.

It can be overwhelming, to say the least.

That overwhelming feeling can lead so questionable financial decisions, such as spending more than you can afford, paying too much for the car you choose, and spending hundreds or thousands more in interest than necessary because you didn’t shop around for the best rate.

The Offer

A Bank of America auto loan will provide 12 to 60 months with APRs starting at 3.59%. There is no origination fee, but Bank of America does not provide online pre-approval for new or used auto loans. You can, however, be pre-approved for a new dealer purchase by applying at a Bank of America branch.

APR discounts

Bank of America provides several APR discounts to its existing customers as well as Preferred Rewards Customers.

Current Bank of America personal checking account holders receive a 0.15% APR discount on their auto loans or auto refinances.

Bank of America also offers an APR discount of 0.25% to 0.50% on auto loans when you enroll in Preferred Rewards at the time of application. There are no fees to participate in Preferred Rewards, but you must have a Bank of America personal checking account and a 3-month average combined balance of $20,000 in your Bank of America accounts and/or Merrill Lynch investment accounts.

Car Buying Basics

The first thing you should do when considering a new or used car purchase is to take hard look at your budget. Consider all of your current debt payments – these should not exceed 50% of your income. Factor in the payment for your new car, and make sure that it will not stretch your budget too thin.

Then, shop around online for your best rate on an auto loan during a 30-day period. Doing all of your rate shopping within 30 days will result in minimal impact because all inquiries within a 30-day period are treated as a single inquiry.

Once you have secured financing and determined the budget for your vehicle, use a site like TrueCar or Kelly Blue Book to help you determine the best price for the car you want to buy by comparing what other people actually paid for the same model.

How To Apply

In order to apply for an auto loan from Bank of America, you must be at least 18 years of age (19 in Alabama or Nebraska). You should also be prepared with the following:

  • Your address, phone number, email address, and Social Security number
  • Employment and income verification
  • Information on the vehicle you wish to purchase, such as the make, model, mileage, and the VIN

In most cases, you will receive approval or denial within 60 seconds of submitting your application with all of the required information online. However, some applicants will require a more detailed review. If you do not receive a decision within 60 seconds you will be contacted by email when the decision regarding your loan is ready.

In some cases, you could receive your funds in as little as 24 hours.

After you apply and are approved for the loan, you have 30 days from the date of the original loan request to use it without being required to re-apply.

The Fine Print

The 3.59% starting APR is only valid in certain states. Go here to check yours. The 3.59% APR assumes an excellent credit history and that you are purchasing a new vehicle from a dealership. Other types of purchases have the following minimum APRs:

  • Dealer New: 3.59% APR
  • Dealer Used: 3.89% APR
  • Refinance: 3.89% APR

Your actual APR may be higher depending upon your creditworthiness, as well as the state in which you reside.

In order to finance a used vehicle through Bank of America, it must be not be older than 10 calendar years, have no more than 125,000 miles, and not be used for commercial purposes. It also cannot have a salvage title.

Bank of America does not finance auto purchases from independent dealers that carry several different brands of vehicles. The general exceptions to this rule are CarMax, Hertz Car Sales, Enterprise Car Sales and other found using this dealer locator tool.

In same cases, if the applicant is not deemed creditworthy enough, Bank of America will require a down payment or minimum loan to value ratio. These are determined on case-by-case basis and will not be known until you apply.

Pros

  • Rates starting at 3.59% APR
  • Terms of 12 to 60 months
  • 60 second online approval, in some cases
  • Funds in as little as 24 hours
  • Will finance private party sales and lease buyouts
  • No origination fee
  • No prepayment penalties
  • Up to 0.50% APR discount when you enroll in Preferred Rewards
  • 15% discount for having a Bank of America Checking account

Cons

  • Exact APR is not known until you apply
  • Down payment may be required for certain applicants
  • Will not finance purchases from independent dealers
  • Used cars must be less than 10 years old and have less than 125,000 miles
  • No online pre-approval
Bank of America

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How It Stacks Up

LendingTree

If you want to explore your options, there are hundreds of lenders on LendingTree ready to compete for your business. LendingTree is the parent company of MagnifyMoney. You simply have to fill out a short online form and upon completion, you may see real interest rates and approval information instantly. While the online form is only a soft pull on your credit, meaning your score won’t be impacted, if you choose to move forward with a lender, lenders will likely do a hard pull on your credit.  Note that since multiple hard pulls only count as one pull, it is smart to have all your hard pulls done at once.

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LightStream

LightStream can beat Bank of America’s starting APR and is far less complex. Its APRs start at 3.09% with autopay, it will finance vehicles from $5,000 - $100,000. Its terms vary from 24 to 84 months, which allows for longer terms than Bank of America.

LightStream

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PenFed

If you like great rates, but a more personalized experience than a big bank provides, then consider PenFed. PenFed is a credit union, but anyone can join with a one-time donation to an eligible charitable donation. It has APRs ranging from 2.49% to 4.49%, terms of 36 to 84 months, and will finance $500 - $100,000. It has no origination fee, but does not provide online pre approval.

PenFed Credit Union

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Shop Around First

When purchasing a new or used car, the two most important factors are making sure you don’t spend more on a vehicle than you can afford, and getting the best rate possible. Before setting foot on a dealership, shop around for your best auto loan rate so you can have one aspect of car shopping taken care of up front.

Compare Auto Loan Offers Here.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at gretchen@magnifymoney.com

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Auto Loan, Reviews

Review: Navy Federal Credit Union Auto Loan

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Car_lg

Navy Federal CU Are you shopping around for the best auto loan rates before you buy a car? If not, you should be. It helps to get an idea of the type of loan you’ll be approved for before you make a trip to the dealership. Plus, credit unions offer some of the best rates out there – comparable with dealer financing, especially when it comes to new vehicles.

Navy Federal Credit Union (NFCU) offers auto loans with rates ranging from 1.99% to 17.99% for those eligible for membership (which includes most any Active Duty members or retirees of various military branches).

What credit score do you need?

If you have a credit score of 700 or above, that will help you obtain the best auto loan rates possible.

NFCU Auto Loan Details

NFCU offers rates as low as 2.59% APR on new and late model used vehicles. Rates and terms are dependent upon the model year of the car you choose, which can make the details a little confusing.

We asked a representative from NFCU to give us a quote on a new and used vehicle at the lowest and highest APRs so you can get an idea of the range of options available. (Only the lowest rates are listed on the website.)

Auto Loan Rates

As of: April 1, 2018, 1:00 AM EST

Loan Type

up to 36 mos.
APR as low as*

37-60 mos.
APR as low as*

61-72 mos.
APR as low as*

73-84 mos.
APR as low as*

85-96 mos.
APR as low as*

New Vehicle

2.59% 

2.99% 

3.29% 

4.69% 

5.59% 

Late Model Used Vehicle

2.59% 

3.29% 

4.09% 

Used Vehicle

4.29% 

4.59% 

5.59% 

 

Keep in mind you can apply for any amount you want. Once you submit your application, NFCU will determine whether or not you’re qualified for that amount.

New vehicle financing: NFCU defines a new vehicle as a 2014, 2015, or 2016 model year with less than 7,499 miles.

Late model used vehicle financing: NFCU defines a late model used vehicle as a 2014, 2015, or 2016 with 7,500 – 30,000 miles on it.

Used vehicle financing: NFCU defines a used vehicle as any vehicle with over 30,001 miles.

As you can see, new vehicles have the most favorable financing and terms – 96 months is offered only for new vehicles. Used vehicles are limited to loans up to 72 months, and have the highest maximum APR.

Not having access to longer terms isn’t necessarily a bad thing considering we wouldn’t recommend you take an auto loan for a term greater than 60 months. The longer your term is, the more you’re going to pay over the life of the loan. No one wants to be paying a car loan back for 8 years. Stick to your budget and remember not to focus solely on the monthly payment – take the overall cost of the loan into consideration.

There’s a useful auto loan calculator on NFCU’s page where you can estimate what your payments will be. For example, if you financed a new vehicle for $15,000 on a 1.49% APR for 36 months, your monthly payment will be $426.00. Financing a used vehicle for $15,000 on a 3.59% APR for 36 months results in a monthly payment of $440.00.

How to Apply for an Auto Loan With NFCU

To apply for an auto loan with NFCU, you need to be a member. When you click “Apply Now” on the website, you’re directed to the login page, so you need to register to fill out an online application.

If you want to apply over the phone, you’ll need to enter your access number and telephone password before applying and speaking with a representative.

The application process doesn’t take very long. Customer reviews mention filling the application out in five to ten minutes and being approved within a few hours. A representative we spoke with said pre-approvals and approvals generally take about 24 hours to process, but some customers are approved instantly, while others receive an answer in just a few hours.

Documents and Information Needed to Apply

The information you need to provide depends on what stage of the car-buying process you’re in. You’ll be required to give your personal information either way.

If you’re still shopping for a car and looking for a pre-approval, you’ll need:

  • Any trade-in details if you’re planning on trading your current car in
  • The total amount you think you’ll need for financing (include all fees minus the down payment)
  • Term of the loan

Pre-approvals are only good for 60 days and can’t be used for a private seller. If you use the pre-approval at a dealership, the dealer must call NFCU and obtain a validation code, which has to be written on the pre-approval draft. NFCU needs to receive the draft from the dealer. Once it’s paid, you’ll receive a promissory note.

If you already know the car you want to buy, you’ll need:

  • The VIN of the vehicle
  • The exact mileage
  • The state where the car will be registered
  • The dealer or seller’s name
  • Trade-in details, if applicable
  • The total amount being financed (includes fees)
  • Term of the loan

You can choose to have a check sent to you via Fedex (for free), or you can pick up the check at a local branch.

The Fine Print

There are no additional fees associated with NFCU’s auto loan.

Rates are based on your credit (having a FICO score over 700 helps) and the year model of the car you’re looking to finance.

Pros and Cons of NFCU’s Auto Loan

Pro: Optional guaranteed asset protection (GAP) is offered for a flat fee of $199 that can be rolled into the financing. This covers you in case your vehicle ever gets totaled or is stolen, and the amount the insurance company is willing to pay doesn’t cover the outstanding loan balance.

Con: The membership requirements are a bit strict. If you don’t know anyone that has served in the military, or has civilian connections to the military, you might not be eligible to join.

Pro: Active duty or retirees are eligible for a 1/4% APR discount if they apply at a branch or via phone. Those that have been members of NFCU for 25 or more years are also eligible for the discount. However, this benefit is limited as you can’t go under the 1.49% APR minimum.

Con: The APR range is on the higher side compared with the rest of the lenders on our list. If your credit isn’t the best, you shouldn’t have to settle for a 17.99% APR.

Pro: NFCU offers a live chat feature in case you have any questions about the loan, and it offers phone support as well. For the live chat, all you need to enter is your name – you don’t need to share any personal information beyond that.

Membership Requirements for NFCU

Since NFCU is a credit union, you must meet the eligibility requirements to join and apply for an auto loan. If you’re Active Duty and in the Army, Navy, Marines, Air Force, Coast Guard, Army or National Guard, a member of the Delayed Entry Program, a Department of Defense (DoD) Officer Candidate/ROTC, DoD Reservist, or a retiree from any service branch, you qualify for membership.

You can also qualify if you work at the DoD as a civilian employee, if you’re a U.S. Government employee assigned to a DoD installation, if you’re a DoD contractor assigned to a U.S. Government installation, or a DoD retiree.

Lastly, if you’re an immediate family member of someone who’s a member or who is eligible for membership, you can join. Immediate family members are grandparents, parents, spouses, siblings, grandchildren, children (adopted and stepchildren), and members of your household.

Not surprisingly, there’s a heavy emphasis on military duty with the NFCU. Those who are Active Duty or retired service members are eligible for a 1/4% APR discount, and they’re the ones most likely to benefit from an auto loan with NFCU.

Comparable Auto Loans

Aren’t eligible to join NFCU? There are still great options out there for an auto loan. If none of the below options work for you, or the ones on our auto loan table, we encourage you to reach out to your local credit union, as they tend to offer the best rates for auto loans.

LendingTree:  There are hundreds of lenders on LendingTree ready to compete for your business. LendingTree is the parent company of MagnifyMoney. All you have to do is fill out a short online form. Upon completion, you can see real interest rates and approval information at once. Some lenders may do a hard pull on your credit and this is normal with auto lending. Keep in mind that multiple hard pulls only count as one pull, so the best strategy is to have all your hard pulls done at once.


LendingTree

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NEFCU: Loans are offered on the same terms of 12 to 96 months, but rates are slightly lower, beginning at 1.95%. The maximum amount you can finance is $70,000, and there is no origination fee. Membership to NEFCU is very limited.

PenFed Credit Union: You can secure financing on terms of 12 to 84 months with rates from 2.49% to 4.49% on new cars and 3.74% to 4.74% on used cars. You can finance between $500 and $100,000, and there is no origination fee with this loan. Anyone can join PenFed, either by having eligibility under its scope of membership or by making a contribution to one of two designated charitable organizations.

PenFed Credit Union

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Shop Around Before You Settle on a Lender

Regardless of which lender you go with, make sure you continue to shop around for the best loan possible. All credit inquiries that occur within 30 days are counted as one inquiry, so you won’t be penalized for it. Take advantage of that and secure the best rate you can get.

Compare Auto Loan Offers Here.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Auto Loan, Reviews

Review: NEFCU Auto Loan for New and Used Cars

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Car_lg (1)

Shopping for a new or used car can be a stressful experience – but it does not have to be.

In order to make an educated and simplified decision it is best to walk into the dealership with low interest financing already preapproved. Knowing that you already have financing taken care of, negotiate the price of your car and then show the dealership your financing offer.

Chances are the dealership will try to beat your financing by offering you 0% financing through the manufacturer – which could save you thousands of dollars in interest over the life of the loan.   If you are offered 0% financing, take it and feel good about your savings. If not, you already shopped around for the lowest rate and you can continue on with your vehicle purchase.

The Offer

NEFCU finances auto loans up to $70,000 with no origination fee and rates ranging from 2.30% to 14.59%. You can choose terms of 12 to 96 months, but NEFCU does not offer online preapproval.

Membership Requirements

Because NEFCU is a credit union, you must be a member in order to apply for an auto loan. You are eligible for NEFCU if you:

  • Live in Nassau and/or Suffolk Counties
  • Work in Nassau and/or Suffolk Counties
  • Worship in Nassau and/or Suffolk Counties
  • Attend school in Nassau and/or Suffolk Counties
  • Regularly conduct business in Nassau and/or Suffolk Counties
  • Family Sponsorship – An existing NEFCU member can sponsor in an immediate family member (mother/father, brother/sister, child, grandparent or grandchild) or any household member
  • Membership is not open to individuals who live, work, worship, attend school and do business exclusively in East Hampton, Southampton and Shelter Island.
  • You can contact NEFCU at: 516.561.0030 or at 800.99.NEFCU outside LI/NYC or send an email to info@myNEFCU.org.

How To Apply

Applying for a NEFCU auto loan online requires the same information that an auto loan application at a physical bank would require, you will just be providing the information online. In order to apply, you should have the following information ready:

  • Contact Information: Your address, phone number, Social Security number, email address
  • Personal References: Required in some cases. NEFCU will request them if necessary.
  • Financial/Employment Information: Your employer, gross income and expenses, and monthly debt payments.
  • Vehicle Information: Make, model, year, mileage and VIN of the auto you plan to purchase.

NEFCU allows you to apply for an auto loan online, at a NEFCU branch or by calling their call center. It does not provide online preapproval, but you can obtain preapproval at a branch before shopping.

Coupon Offer

NEFCU offers a $300 coupon valid at select dealers on your new or used auto. You can apply online, at a branch or by telephone by calling 1-800-99-NEFCU. Your rate will be determined by creditworthiness, loan amount, year of the vehicle, and loan term, as per the rate chart.

Everything Automotive Service

NEFCU’s Everything Automotive service allows you to shop for new and used autos, compare different makes and models, take a virtual test drive and schedule in person test drive with different dealerships. Everything Automotive also offers discounted GAP insurance, auto insurance, and extended auto warranties.

This service is accessible only to NEFCU members who apply for auto financing.

The Fine Print

Interest rates on new and used auto loans through NEFCU are based upon vehicle year and loan term, as seen on the rate chart here. The rates shown on the chart are subject to credit approval, and those who do not qualify may be offered a higher interest rate. You will not know your rate until you apply.

Not all borrowers will qualify for an 8-year loan term, and you are required to have and maintain a credit score of 670 or higher in order to qualify for the rates shown in the rate chart.

Used auto loans through NEFCU must not be older than 9 years, but there are no mileage restrictions. There are no restrictions on vehicle make or model, but NEFCU will not finance a purchase of a used auto from a private party seller.

The minimum loan amount for a 6-year term is $15,000, for a 7-year term is $25,000, and $30,000 for an 8-year term. Only new vehicles are eligible for an 8-year loan term, and are eligible for a 100% loan to value ratio.

Pros

  • Rates starting at 2.30%, based on creditworthiness
  • Loans up to $70,000
  • Can apply online, at a branch, or by phone
  • $300 off of your auto purchase at select dealers
  • No prepayment penalties
  • Discounted auto insurance, GAP insurance, and extended warranties through NEFCU
  • No make or mileage restrictions for used auto loans

Cons

  • Rates as high as 14.59%, based on creditworthiness
  • No online preapproval
  • Do not know your rate until you apply
  • Must be a NEFCU member to apply
  • Rate chart can be complicated
  • Minimum $30,000 new auto loan to qualify for 8-year loan term
  • Required to have an maintain a 670 credit score for 8-year loan term
  • Used autos must be 9 years old or newer

How It Stacks Up

Looking for a lower APR? Capital One’s APRs start at 3.89%, and it will finance up to $40,000. Even though its maximum loan amount is lower than NEFCU’s, it offers online preapproval, loan terms of 36 to 72 months, and no origination fee. With rates topping out at 9.98% for new car loans, NEFCU’s interest rates can be fairly steep, but Capital One is a good alternative.

Capital One

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If you’re looking for the personalized experience of a credit union, but are not eligible to join NEFCU, then consider PenFed Credit Union. Anyone can join PenFed Credit Union with a contribution to one of two designated charitable organizations. Its rates range from 2.49% to 4.49% and it will finance loans up to $100,000. PenFed does not allow you to obtain online preapproval, but it charges no origination fee and offers terms of 36 to 84 months.

PenFed Credit Union

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on PenFed Credit Union’s secure website

Check a Variety of Lenders for Your Auto Loan

Credit Unions are now financing more auto loans than traditional banks because of their more personalized customer experience, more competitive rates, and focus on the customer. When shopping for your auto loan, consider shopping credit unions such as NEFCU for a more flexible, lower interest auto loan.

Compare other auto loans here. 

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Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at gretchen@magnifymoney.com

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