Informa Research Services, a rate tracking company, recently released the results of a study showing that the average interest rates on indirect car loans are very nearly identical at credit unions and banks. This is somewhat contrary to popular belief. Here are how their interest rates stack up.
- 5 year new auto loan: Credit Union 4.93%…Banks 4.95%
- Same loan with sub-prime credit: Credit Union 6.76%…Banks 6.64%
- Same loan with risky credit (under 650): Credit Union 8.68%…Banks 8.62%
- Direct 5 year new car loans: Credit Unions 3.98%…Banks 5.44%
- Used Car Loans: Credit Union 4.12%…Banks 5.68%
As you can see, credit unions have a slight edge on most banks and even less than stellar credit scores can get approved for a decent interest rate. Now may be the best time to buy a car in the last four years.