It’s no mystery that it's important to maximize your hard-earned income, and selecting the best lender for your Auto Loan can do just that. It may come as something of a surprise, but the best “bank” for your Auto Loan just may be a credit union.
The Best Bank for Your Auto Loan Isn’t a Bank
From 2013 through 2022, the number of credit union members grew from 98.4 million to an eye-raising 137 million in 2023. That credit union growth is no fluke.
The driving reason why an increased number of people are leaving traditional banks for local credit unions involves trust, getting access to affordable loans, lower fees, and community impact. Banks aren't necessarily in business of supporting your community; they're usually corporations formed to make money for their shareholders. While there’s nothing wrong with starting a business and turning a profit, it’s important to understand how the differences between a big bank and a credit union impact you when applying for a car loan.
Credit Union vs Bank: Is There a Difference?
A traditional bank follows the same fundamental structure as most corporations. Wealthy people and investors buy shares with the expectation they'll receive a return on their investment. Those in charge of running the operation find ways to grow the institution's wealth through fees, service charges, and by setting interest rates high enough to generate profits that will be divvied up among the stakeholders. And when shareholders aren’t happy with their payout, rates and fees will increase in order to generate more compensation for the stakeholders.
By contrast, a local credit union’s goal is to provide affordable borrowing opportunities for its members. Because a credit union doesn't have shareholders, any profits earned above expenses are retuned to members in the form of lower fees, lower loan rates, and higher earning on savings accounts to provide more financial opportunities for its members. Once someone joins a credit union, they become a member-owner with equal stake in the organization. They get to enjoy access to high earning Term Share Certificates (or CDs), Money Markets, as well as low-interest mortgages, car loans, credit cards, and more.
Financially speaking, those are key reasons the best bank for Auto Loans isn’t a bank. It’s a not-for-profit credit union.
The Best Credit Union or Bank For Your Auto Loan Must Offer:
There are other fundamental differences between banks and local credit unions that continue to attract people to a credit union. For example, credit unions are adaptable – they can create unique programs that serve the specific needs of their members.
Peach State has been able to offer their local Georgia and South Carolina members niche opportunities such as our Ready, Set, Drive first-time vehicle buyer program and our Fresh Start Auto Loan designed for those with less than perfect credit looking for a second chance at a car loan.
While credit unions and banks both offer Auto Loans for new or pre-owned vehicles, other misconceptions may prevent people from considering credit unions when it comes to Auto Loans.
- Credit Unions are Difficult to Join: While the word "membership" can be confusing, joining a credit union is simpler than one might imagine! Joining Peach State requires a $5 membership and a $5 USA Patriot Act recovery fee. We proudly serve members and Select Employee Groups (SEGs) throughout Georgia and South Carolina (review our list to see eligibility requirements).
- Credit Unions are Only for People that Have No Credit:Credit unions are for everyone – no matter if you do or don't have credit. One of the best parts of joining a credit union is the flexibility in its lending program that allows them to serve almost anyone.
- Credit Unions Don't Offer Auto Loans: At Peach State, we offer a variety of Auto Loans to meet the unique needs of our Georgia and South Carolina members including custom programs designed for first-time car buyers, those with less than perfect credit, and even businesses.
Now that the misconceptions have been corrected, explore what features your lender must offer when it comes to finding the perfect Auto loan for your new ride.
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1: Competitive Auto Loan Rates
Lower Auto Loan rates mean extra savings for you! A recent comparison by the National Credit Union Administration shows the average interest rates for new and pre-owned vehicles favored local credit unions over banks. Those lower interest rates coupled with fewer fees equal real dollars saved.
2: Flexible Auto Loan Terms
Members can customize an Auto Loan term through an online car payment calculator, helping them create the ideal monthly figure to fit their budget. When they're ready to apply, members can apply online, over the phone with our Loans by Phone team at 770.580.6000, or in person to get help finding the perfect Auto Loan rate, term, and affordable payment to fit their monthly budget.
3. Local Loan Processing Center for Quick Decisions
Commercial banks with corporate headquarters located out of town typically function slowly. Wait times can be excessive if you're someone who has a few dings in your credit history or straddles the line in terms of income. Credit unions often keep the application process local which means a fast turnaround for decision-making.
4: A Unique Program for First-Time Car Buyers
Young adults looking to get their first Auto Loan at a competitive rate may take the first loan they're offered, but proper research can help them understand the savings that can come with a first-time car buyer program! Credit unions typically offer unique programs geared towards helping their members and community become successful in their finances versus turning them away for having no credit. Beyond enjoying that new car smell and extra savings, Peach State Auto Loan recipients even have an opportunity to learn how to build their credit score with free financial coaching because we also value sharing financial education with our members.
5. A Unique Program for those with Less than Perfect or Bad Credit
Credit unions are known for working with their members one-on-one to achieve financial success. In the interest of helping people rebuild their credit history, credit unions typically have car loan alternatives to help those with less than perfect or bad credit get a fresh start at rebuilding their credit score while getting into the vehicle they need. Explore Peach State's Fresh Start Auto Loan program today!
6: Discounted Car Insurance Rates & Extended Warranties
Always check with your potential Auto Loan lenders to see if they offer discounts for car insurance and other common vehicle expenses. Peach State offers a variety of ways to help members save money on automobile expenses such as discounted auto insurance, Guaranteed Asset Protection (GAP) Coverage and extended car warranties.
7: A Car Buying Shopping Assistant
It may sound unusual for a lender to help with the car-shopping process, but that’s precisely what some credit unions are offering. Peach State's Auto Assistance program helps members identify and shop for vehicles in their price range, review CarFax reports, negotiate trade-in value, and more. If your local lender is willing to save you time with your car shopping, it is an option you must consider. Explore Peach State's Auto Assistance vehicle buying experience for free!1
Apply for Your Auto Loan in Georgia or South Carolina With Peach State
At Peach State, our experienced lending team is ready to help you with your upcoming car buying experience and Auto Loan application. Our qualified Georgia and South Carolina members can count on us for new or pre-owned car financing that features competitive rates, flexible terms, and fast local decisions.
Start your car-buying journey today by getting pre-approved for your car loan, or if you're ready to finance your car, apply online, over the phone with our Loans By Phone team at 770.580.6000, or stop by any of our convenient branch locations today!
Now that you've discovered the best bank for auto loans is a credit union, it's time to review our "Car Loans 101: Car Buying Made Easy" complete guide to help you find the best car for your needs and budget!
1 Peach State FCU has contracted with Auto Assistance, LLC to make this service available as a convenience to our members. Any manufacturer’s warranties are not services of the credit union and are not obligations of or guaranteed by the credit union. The credit union makes no representations as to the services of any provider or any vehicles purchased.
