MADISON, Wis. (4/23/13)--Among all the reasons to shop at a credit union for car loans, five in particular stand out, Mike Schenk, senior economist at the Credit Union National Association, told U.S. News and World Report Monday.
In the article, "My Money: 5 Reasons to Shop at a Credit Union for Car Loans," Schenk said consumers are better off choosing a credit union over a commercial bank for a new- or used-car loan because:
1. You have a better chance of having your loan approved. A credit union might be "more likely to listen to your story than a commercial bank," if you have mediocre credit or have had credit problems in the past, Schenk said.
2. You obtain lower rates. A five-year term is the most common loan term for a new or used car, and credit union rates usually are much lower than the average rate at a competitor bank.
3. You get personalized service. Because credit unions are non-profit organizations and try to provide members with high-quality customer service, members have a more personable experience at a credit union because credit unions are run by volunteer boards.
4. You have availability of educational resources. Nearly all credit union branches have a dedicated education and resource center, where members can learn more about financing options and how to make the best decisions when assessing the value of their car purchase.
5. Credit unions use a non-sales approach. Credit unions work for their members and aren't driven to sell you anything that equates to extra money in their pocket. All profits go back to members in the form of lower rates on other financial products, such as savings and loans. Commercial banks often grant their lenders bonuses or other compensation for approved loans.