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Best Credit Unions for Car Loans

Pentagon Federal Credit Union offers competitive rates and is easy to join

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A credit union is a not-for-profit financial organization that is owned by its members. It is similar to a bank in that it offers banking services such as credit cards, checking accounts, savings accounts, and various types of loans, including auto loans. 

The best credit unions for car loans are reputable and have been around for a while. They also offer additional loans and services, competitive rates, and low fees.

Best Credit Unions for Car Loans of 2022

Best Overall : PenFed


Pentagon Federal Credit Union

Pentagon Federal Credit Union

Why We Chose It

PenFed offers competitive rates and robust financing tools and features, and it is easy to join.

Pros and Cons
Pros
  • Simple to join

  • Calculators and rate comparison tools

Cons
  • Website is a bit overwhelming

  • Must be a member to access products

Overview

Also known as PenFed, Pentagon Federal Credit Union serves people in all 50 states, Puerto Rico, Washington D.C., Guam, and Okinawa, Japan. However, most of its branches are concentrated in the greater Washington D.C. area. The rest of its customers are served digitally, and services include banking products and services, credit cards, car loans, mortgages, and home equity loans.  

PenFed was created to serve military members, veterans, and federal employees, but it is now open to anyone. You can join by simply opening a savings account for $5.

You can finance a new or used car or refinance a current auto loan with PenFed. The union also has a car buying service that helps you search for cars from a trusted network and offers discounted rates if you use the service. Discounted rates start at 4.44% for new cars for terms of 36 months. Used cars with terms of 36 months start at 5.64% through PenFed’s partnership with TrueCar.

PenFed also offers a lot of educational resources and step-by-step guides for first-time car and home buyers, financial calculators, mortgage knowledge, an advice center, and a financial hardship center. 

PenFed offers perks to its members, including discounts on insurance, discounts on rental cars, and mechanical breakdown protection. It also offers discounts at select retail stores and on some tax preparation services.

Best for Bad Credit : Consumers Credit Union


Consumers Credit Union

 Consumers Credit Union

Why We Chose It

Consumers Credit Union is easy to join, offers nationwide services, and works with people with bad credit and rebuilding their credit.

Pros and Cons
Pros
  • No minimum credit score

  • Nationwide coverage

Cons
  • Rates not as competitive

  • Fewer educational resources

Overview

Consumers Credit Union has physical branches throughout northeast Illinois but services the entire country and is open to members nationwide. It specializes in helping consumers take charge of their finances and works with them to rebuild their credit and improve their credit score. It’s an ideal place to start if you want to get a car loan but don't have good credit. 

Consumers Credit Union looks at your overall financial profile, not just your credit score. The company offers auto loans, home loans, home equity loans, personal loans, business services, and a full range of banking products and services. 

Anyone can join the credit union by paying $5 and becoming a member of the Consumers Cooperative Association. The website is well laid out and easy to navigate and goes into detail on applying for membership and then applying for a car loan. It offers an online car buying service that claims to save you money and will deliver the car to your home.

Consumers Credit Union’s car loan rates start at 3.49% for up to 60 months for cars manufactured in 2020 or newer. Older vehicles and longer loan terms will increase the interest rates. Lower credit scores will also receive higher rates. You can apply for a car loan online with the step-by-step guide, and then an agent will call you to verify your details.

Best for Competitive Rates : Navy Federal Credit Union


Navy Federal Credit Union

Navy Federal Credit Union

Why We Chose It

Navy Federal Credit Union is known for offering competitive rates to its members who want to purchase a car, and it offers deeper discounts for active and retired military members. 

Pros and Cons
Pros
  • Competitive rates with extra discounts

  • ATMs throughout the country

  • Overall positive customer reviews

Cons
  • Strict membership requirements

  • Website could be more organized

Overview

Navy Federal Credit Union offers banking services for whichever way you want to bank, including branches, ATMs, and co-op locations throughout the country, as well as an app. In addition to new and used car loans, it offers loans on motorcycles, boats, and recreational vehicles. 

Navy Federal Credit Union offers some of the lowest rates in the industry to its members. Rates start at 3.29% for new and late-model used vehicles up to 36 months. Rates, of course, go up for longer terms. Terms for used cars go up to 72 months, and terms for new vehicles go up to 96 months. 

Although there are numerous resources and low rates offered by Navy Federal Credit Union, you do have to meet the membership requirements to take advantage of them. Membership is limited to the armed forces, the Department of Defense, veterans, and qualifying family members. Full membership details are listed on the website.

Easiest to Join : NASA Federal Credit Union


NASA Federal Credit Union

NASA Federal Credit Union

Why We Chose It

NASA Federal Credit Union may have an intimidating name, but it has easy membership requirements, competitive rates, and some great member perks. 

Pros and Cons
Pros
  • No payments for the first 60 days

  • Nationwide coverage

Cons
  • Only offers branches in the D.C. area

  • Lower fees only available for shorter term loans

Overview

NASA Federal Credit Union is open to NASA employees, NASA retirees, and their family members. However, you don’t have to be a world-class scientist to enjoy membership. It also offers membership to non-employees who join the National Space Society, and the first year is complimentary. After that, your membership will cost $47 a year with automatic renewal. Membership includes their magazine, the latest information on space news, and invitations to conferences and events. 

NASA Federal Credit Union offers new and used auto loans and recreational vehicle loans. Auto loan rates start at 3.64%, and although there is no payment due for the first 60 days, interest does accrue. The lowest rates have terms up to 36 months. Longer terms up to 84 months are available, but the rates do increase. You can apply online in a few minutes. You can also reach customer service through email, online chat, and over the phone. 

NASA Federal Credit Union has multiple branches in Maryland and Virginia, near the D.C. areas and shared branches at affiliated credit unions. However, the majority of its services are offered online, including digital baking, student loans, credit cars, personal loans, financial planning services, and car loans.

Best for Fast Approvals : Alliant Credit Union


Alliant logo

Alliant logo

Why We Chose It

Alliant Credit Union offers same-day car loan approvals, low rates, and good customer service. 

Pros and Cons
Pros
  • Same day approvals in most cases

  • No prepayment penalties

Cons
  • Online only (no branches)

  • No online chat option

Overview

Alliant Credit Union is an online credit union based in the Chicago, Illinois area. It’s the largest credit union in Illinois and one of the biggest in the nation. However, it doesn’t have physical branch locations and instead offers online and over-the-phone banking and loan services. It prides itself on putting its members first, offering personal customer service, competitive rates, and fast loan-approval times. 

To join Alliant Credit Union, you can meet certain residency, employment, or relationship requirements, or you can just donate $5 to its partner charity, Foster Care to Success.

In addition to car loans, Alliant Credit Union offers online banking services, IRAs, trust accounts, credit cards, home loans, commercial real estate loans, and more. It has a unique car buying service that offers 0.50% off your rate for using it to purchase your next car. It also helps you with car research and lists cars from its trusted network and offers a vehicle service program and loans for recreational vehicles.

Alliant Credit Union offers financing for both new and used vehicles. Its rates start at 4.35% for new cars for 60 months and 4.70% for used cars. These rates will be 0.4% higher without autopay. Car loans can be up to 84 months with presumably higher rates. You can apply online or over the phone, and approval is usually done the same day. The approval process is easy with detailed instructions on the website.

Best for Green Vehicles : Suncoast Credit Union


Suncoast Credit Union

Suncoast Credit Union

Why We Chose It

Suncoast Credit Union offers low rates to its members who are financing green cars. It also offers helpful financing tools and friendly customer service. 

Pros and Cons
Pros
  • Rates starting at 3% for green cars

  • Offers additional resources including webinars

Cons
  • Strict membership requirements

  • Only serves part of Florida

Overview

Suncoast Credit Union is Florida’s largest credit union and has branches throughout Florida’s west coast. In addition to car loans, it offers personal loans, mortgages, full banking services, and financial tools. It has an easy-to-use website with a lot of consumer educational material and financial calculators, as well as webinars and how-to blogs. 

Suncoast Credit Union’s auto loan rates start at 3% for green vehicles and 3.25% for other cars. You can also get financing for watercraft, recreational vehicles, and motorcycles as well as cars. Max terms are usually 72 months for cars.

It also offers a helpful chart that lists the starting rates for different types of vehicles and rewards its members with low rates for purchasing a green car, defined as an electric vehicle or a car with a combined EPA rating of 28 mph or better. 

To join Suncoast Credit Union, you must meet its membership requirements: You must live, work, attend school, or worship in one of the counties in Southwest and the West Coast of Florida that it serves. It does require proof, such as a utility bill or a signed lease.

Final Verdict

We reviewed several reputable credit unions all over the country. Overall we recommend checking out Pentagon Federal Credit Union due to its positive overall reviews, flexible repayment terms, and competitive interest rates. 

Compare the Best Credit Unions for Car Loans

Company Starting Interest Rate Terms Loan Amounts Membership Requirements
Pentagon Federal Credit Union Best Overall 4.44% 36–84 months $500-$150,000 $5 deposit
Consumers Credit Union Best for Bad Credit 3.49% Up to 84 months Varies $5 deposit 
Navy Federal Credit Union Best for Competitive Rates 3.29% Up to 96 months Varies  $5 deposit and ties to the U.S. military 
Nasa Federal Credit Union Easiest to Join 3.64% 36–84 months $5,000–$125,000  $47 per year membership 
Alliant Credit Union Best for Fast Approvals 4.35% Up to 84 months Varies Employment or residency restrictions or a $5 donation 
Suncoast Credit Union Best for Green Vehicles 3% Up to 72 months Varies Residency or employment restrictions 

Why Should I Use a Credit Union for a Car Loan?

You should use a credit union for a car loan for the following reasons:

  • More competitive interest rates (typically)
  • Lower fees
  • May finance lower-priced cars
  • Member perks
  • Less haggling than with a dealership

What Credit Score Do Credit Unions Require for Auto Loans?

There isn’t a minimum credit score that all credit unions require for auto loans. It depends on the credit union, the type and age of the car, and the borrower’s other qualifications such as employment history and income. The higher your credit score, the lower your rate will generally be. Typically, a credit score over 720 will give borrowers the very best rates. 

Are Credit Unions Better for Car Loans Than Traditional Banks or Dealerships?

If you already belong to a credit union, it’s often the best place to start shopping for a car loan. The credit union usually offers better rates and terms than traditional banks and dealerships and they usually charge lower fees as well. The credit union may also be more willing to offer you an auto loan if you have less than perfect credit based on the fact that you’re a member and have a banking history with them. 

Do Credit Unions Have Competitive Rates for Car Loans?

Credit unions typically offer competitive rates for car loans because they are set up as not-for-profit organizations and invest their profits into their members. They have less overhead and usually fewer locations than banks so can pass on savings to their members. You can usually get a better rate with a credit union because you have an established banking history and relationship with them. 

Methodology

We reviewed a dozen credit unions for car loans before carefully selecting our top picks. We chose reputable companies that offer car loans as well as additional features and banking services. We selected a variety of credit unions with different membership requirements and also considered interest rates, member perks, locations served, types of cars financed, and borrower requirements.

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