This is not your father’s Oldsmobile. Times have certainly changed when it comes to buying a car.
The cost of buying a car continues to rise. The average price of a used car now tops $25,000, with the average new vehicle weighing in at a lofty $48,000.
What are consumers to do? Well, they’ve been doing it. Recent data shows that consumers are now taking out longer term auto loans to keep payments manageable. In the first quarter of 2025, 20% of all new car loans were for seven-year terms. That is an all-time high and reflective of the high-priced times we are in. Even with these extended term loans, more and more consumers, almost 25%, are now managing $1,000 car payments.
One of the best ways to combat this trend is of course to be an educated buyer and do your research when getting ready to buy so you are aware of the price points for the cars you are evaluating. Members should always look to purchase a vehicle that fits comfortably within their budget, with some reserves on hand for emergencies. But once you are ready to sign on the dotted line, nothing is more important than the interest rate on the loan.
Your credit union recognizes the challenges of buying a car in today’s market and we are here to help. Not only does the credit union offer highly competitive auto loan rates, but we also make it easy to improve your rate with some simple steps.
Credit union members can earn a variety of discounts just for doing many things they would normally do. For example, members with a direct deposit of $500 or more per month earn an 0.25% loan discount. Members who set up auto pay to pay their loan receive an 0.25% discount. Members who elect to put down a 20% down payment can also earn an 0.25% discount. For members who have had a loan with the credit union prior and paid it off successfully they can earn another 0.25% reduction. These reductions add up and can make a significant difference in the cost of your loan. This is the credit union difference. In challenging times we are looking for ways to assist our members.
To review, the first step should be setting a manageable budget you can comfortably afford to pay. Second, is to do your research to ensure you are paying a fair price. Third, be sure you are getting a competitive rate and take advantage of the discounts your trusted credit union provides.
But there are more things today’s car buyer needs to consider. Given the high cost of vehicles, members should ask for a GAP (Guaranteed Asset Protection) insurance quote to protect your investment. This insurance can protect you in the unfortunate situations of your car being totaled or stolen. In most cases, GAP insurance will cover the “gap” between the insurance payout and what you still owe on your loan. Here’s even better news. Your credit union offers one of the very lowest-cost GAP policies in the country, and it can be added into your loan for convenience. We also encourage members to look at disability insurance for auto loans as it can be invaluable if disability occurs.
We know there is a lot for you to consider when buying a car, and we are here to assist you in that process. Being educated on the marketplace and your loan options is vital. Members can schedule a one-on-one consultation with a loan specialist today by clicking here.
