Parsons Federal Credit Union vs. Dealer Rates

When shopping for a vehicle loan, you want to be sure you’re getting the best deal possible. However, a lower rate doesn’t necessarly mean you’re going to save money. Most dealers will try to offer you a lower or comparable rate, but there are often hidden fees and stipulations.

Before you make a decision, ask your Dealer the following questions:

1) What are the terms of the loan? When dealers offer “lower” rates, they usually come with a maximum loan term of 36-months. This means that your monthly payments will be higher. PFCU offers terms up to 72 months for new and pre-owned vehicle loans. Our flexible terms and rates allow you to have monthly payments that fit your budget. (See example A below)

2) Are there any application or documentation fees? Most dealers (and banks!) will charge you an application or documentation fee, which is usually about $100. Adding this amount to your loan, even with a “lower” dealer rate, you may end up paying more money, in the end. PFCU does not charge you application or documentation fees.

3) Is the Dealer offering a rebate? If you choose the dealer’s rebate plan, you forego the low or zero-interest rate loan. Adding the rebate to your down payment can make PFCU financing very attractive - because the larger down payment reduces the amount financed. (See example B below)

4) Are there any pre-payment penalties? At times you may want to pay a little bit more than your minimum monthly payment, or pay off the loan early. Some dealers will not allow these pre-payments and will charge you a penalty fee if you pay your loan off early. PFCU does not charge any pre-payment penalties.

Example A:

* APR=Annual Percentage Rate

Example B:

By taking the rebate, you save $432.92!

* APR=Annual Percentage Rate