WASHINGTON (9/5/12)--With 2012 shaping up to be the strongest year for new auto sales since the start of the recent recession, Credit Union National Association (CUNA) President/CEO Bill Cheney in a new column in The Huffington Post encouraged potential car buyers to shop around carefully when it comes to financing, noting they may well find amid dealers' 0% ads that their best option is to finance through a credit union.
On average, new car loan rates are substantially lower at the nation's credit unions compared to the banks, Cheney wrote. Financing through a credit union could save consumers more than $1,000 over the life of their auto loan, he added.
While many of the older model cars that remain on the road are a sign of the recent financial crisis, Cheney noted that improving labor markets, and steadily aging automobiles, are resulting in increased demand for new cars. Cheney advised potential auto buyers to maintain good financial habits and shop around when they look for financial products and services. "Besides purchasing a home, buying and financing a new car is one of the biggest financial decisions you'll ever make. Cautious and informed purchasing can save consumers thousands," Cheney said.
He noted that September, when dealers are looking to get rid of this year's models, is an excellent time to negotiate with dealers. He also advised buyers to be wary of rock-bottom interest rates offered by some dealers, as those interest rates, in many cases, are only made available to the top 10% of all purchasers.
Loan terms for low-rate financing through dealerships may be for short terms, such as three- or four-year loans, and buyers may need to go without some offered rebates or cash-back options if they accept a low-rate loan from their auto dealer, Cheney said.