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Replace Your Clunker (Finally) With a Credit Union Auto Loan

Key Takeaways

We Killed Car Ownership?

Well exCUSE us! It’s not our fault the economy is lousy and we can’t afford a new car.

There is Hope

With lower interest rates and better approval rates, credit union auto loans are making buying a car possible again.

Start Saving Now

Make the switch to a credit union to start saving more $$$, and take care of your clunker to get the best trade-in value.




The list of “things Millennials have killed” continues to grow. And some people think car ownership is next in line at the guillotine.

Millenials Killed

With public transportation expanding into smaller metros and Millennial’s and Gen Z’s love of ride sharing, it’s no wonder many think Carpocalypse has begun.

But many of the studies about the decline in car ownership ignore one thing: the lousy economy.

Of course we’re buying fewer cars. Because we are doing our damnedest to make sure that hand-me-down car we got in high school lasts for a decade or more. We’ve waited and waited and put 200,000 miles or more on our old clunker. We’ve taken care of it as best we can so we can get the most out of it and avoid higher car payments and car insurance rates.

But now, with the financial crisis settling a bit and some Millennials getting back on their feet financially, car ownership feels like it’s within reach.

And dammit, we deserve that new car.

Even so, we haven’t recovered enough to just save up for a few years and buy that new car in cash.

That’s where credit unions come in.

Wayne's World headbanging gif

Credit Union vs Bank Auto Loan

Credit Union Auto Loans Have Lower Interest Rates

Credit unions are not-for-profit financial institutions. Instead of helping the rich get richer (and contributing to wealth inequality) like banks, credit unions are able to give any fees and interest members pay back to the community in the form of lower interest rates — because no one is trying to make a profit off you.

So you can pay your car off faster or make lower monthly payments depending on what suits your budget and needs.

It’s Easier to Get Approved for a Credit Union Auto Loan

Let’s face it — Millennials and Gen Z aren’t known for their fabulous credit scores. Our credit scores are usually sitting somewhere in the “fair” range because of student debt or just a lack of credit history.

For banks, giving loans to someone with a credit score of 660 is seen as a big risk. Their main concern is profit, and they are therefore much more hesitant to give you a loan if they think they may not see a return.

Credit unions, on the other hand, are smaller and often have close relationships with their members. This means credit unions often care more about you getting what you need (like that new car) than whether or not they’ll profit, which allows for more personalized service.

In fact, they often work with you to figure out how to get the loan you need and improve your credit score.

rock on toy car driver

Credit Unions Offer Lower Loan Minimums

Just because you’re ready to buy a car doesn’t mean you’re ready to buy an expensive one (the economy hasn’t improved that much). So if you’re buying a used car with 50,000 miles on it from 2008, it will be quite a bit less expensive than that 2019 Acura with a heated steering wheel and rear view camera.

Many banks don’t give out small loans, which can be inconvenient if you’re not buying an expensive car. Credit unions, however, often don’t have minimums on auto loans. So if you’re replacing your clunker with a not-quite-as-clunky clunker, a credit union might be the way to go.

Credit Unions Help You Save in Other Ways

Remember how we said credit unions are not-for-profit? Well, that has other benefits, too — like lower fees. So beyond just saving on your car, you can also save in other ways, through lower fees and higher interest rates on savings accounts, etc.

And with some credit unions, you even get a say in how the company is run because you’re technically a member, not a customer.

Or let’s say you already bought that new car, but you’re struggling to keep up with payments. You may also be able to refinance your auto loan through a credit union to take advantage of all these benefits.

You Deserve to Get That New Car…

Without drowning in high interest rates and fees.

Get Your Credit Union Auto Loan

How to Save For Your New Car

Start Early

Don’t wait for your car to collapse on the highway to start saving for a new car. Even if you plan to take out a loan, saving up even a couple thousand dollars can dramatically decrease your monthly payments.

And remember, you don’t have to cut back in huge ways to save a significant amount of money. There are plenty of little ways to save that can really add up over the course of a year or two.

Set Up a Savings Account

Have you ever pulled out your debit card at the end of the month knowing you’ll be dipping into savings if you use it?

It’s easier to avoid this if you have you keep everything you’re trying to save in a separate savings account. That way, you won’t be able to mindlessly spend it. You’ll have to make a transfer. And even if that transfer can easily be made on your credit union’s app, it still puts an extra barrier between you and that impulse buy so you have time to ask yourself if those new sneakers are really worth pushing off buying a car a little longer.

girl driving toy jeep gif

Automate Your Savings

Many employers allow their employees to split their paycheck — 75% goes to checking, 25% goes to savings, etc. You might find it’s easier to avoid spending your savings money if you never get the chance to see it in your checking account at all.

If you’re not able to split your paychecks, many banks allow you to schedule a regular transfer between accounts. If you always get paid on the first of the month, you could schedule an automatic transfer for whatever your monthly savings goal is on the second.

Take Care of Your Current Clunker

Even if you couldn’t care less about your current car and whether the paint is chipping or the headlight is broken, it’s important to take care of it until its very last ride to the dealership for a trade-in.

Why? Because the better condition your car is in, the more money you can get for it.

Even if the difference between a Ford Focus with a dent in the side and a dent-less Ford Focus is only $100, every little bit helps.

Better Interest Rates, Fewer Fees

Get a manageable auto loan — and a ton of other benefits — from a credit union.

Find Your Credit Union

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