Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
Updated on Wednesday, September 30, 2015
Are you shopping around for your 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 may offer some of the best rates out there – comparable with dealer financing, especially when it comes to new vehicles.
Navy Federal Credit Union offers auto loans with APRs (annual percentage rates) ranging from 1.79% 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 your best auto loan rates possible.
NFCU Auto Loan Details
NFCU offers APRs as low as 1.79% 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 APRs are listed on the website.)
Auto Loan Rates
|As of: October 9, 2018|
up to 36 mos.
Late Model Used Vehicle
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 – up to 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.
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 1.79% APR.
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 better rates for auto loans.
LendingTree: There are hundreds of lenders on LendingTree ready to compete for your business. 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 within a specific timeframe, so the best strategy is to have all your hard pulls done at once.
Jovia Financial Credit Union: Loans are offered on the same terms of 12 to 96 months, but APRs are slightly lower, beginning at 2.89%. The maximum amount you can finance is $100,000, and there is no origination fee. Membership to Jovia Financial is very limited.
PenFed Credit Union: You can secure financing on terms of 36 to 84 months with APRs from 2.14% to 17.99% on new cars and 2.99% to 17.99% on used cars. You can finance between $500 - $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.
Shop Around Before You Settle on a Lender
Regardless of which lender you go with, make sure you continue to shop around for your 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.