New & Used Vehicle Loans

Before you begin your search for a new vehicle that you will be financing the first step you should take is to check your credit report/credit score. The higher your score, the lower your interest rate, which will help you save money over the life of the loan. Your credit score is determined by the information in your credit report which includes how quickly you pay your creditors. You can check your credit report once a year for free, this gives you the opportunity to verify the information on your credit report is current and correct any inaccuracies.

Next you need to determine how much you can afford. Start by thinking about the monthly payment that would comfortably fit into your monthly budget. When thinking about this number don’t forget to account for insurance and maintenance costs of a new vehicle.  Missouri Central auto loans have terms from 2 to 7 years depending on the age of the vehicle. A longer term means that you your monthly payment will be less, but when you account for interest you can end up paying a substantial amount more when financing the same amount for a 6 year loan as opposed to a 3 or 4 year loan.

Missouri Central can help you determine how much you can finance before you start shopping and get your loan pre-approved.

Now it’s time to go car shopping and choose your vehicle! If you have gotten pre-approval on a car loan from Missouri Central Credit Union, you now have the benefit of focusing solely on negotiating the purchase price of the vehicle rather than the purchase price and financing. Many car dealerships offer financing, but generally it’s better to use a credit union for financing rather than a dealer. Remember that financing over a longer loan term will lower your monthly payment, but it will result in paying more in interest throughout the life of the loan.  Dealerships often offer a number of add-on items, such as debt protection, gap coverage, paint sealants, an extended warranty, fabric/leather protection, etc. It is a good idea to do research on these items ahead of time so that you are informed and less likely to feel pressured at the time of the sale.  Missouri Central offers debt protection, gap coverage, and extended warranties at a fraction of the cost offered by the dealers!

Financing through a credit union is almost always a better idea than using dealer financing. Credit unions typically offer the best financing terms and lowest car loan interest rates.

In addition to lower cost debt protection, gap coverage, and extended warranties, the credit union has no hidden charges.  And, if you need to support during the life of your loan, there are trained local credit union representatives ready to provide answers to any questions.

Getting a loan at Missouri Central Credit Union is easy!   Whether you apply online, by phone, or at the credit union, most auto loans are approved within minutes!

A pre-approved car loan is when you have secured financing through the credit union and will not require financing through the dealership. From the perspective of the dealership, the transaction would essentially be a cash transaction, which gives you a better position in regards to negotiations.

Missouri Central Credit Union offers a variety of loans to meet all of your auto loan needs.  We have great rates and repayment terms for loans to purchase a new or used auto.   If you already have a loan somewhere else, we may be able to save you money by refinancing to lower your monthly payment.  And, if you have a leased vehicle, that you want to purchase, we can do that too.

If you had to finance with the dealer to get the rebates, be sure to refinance with the credit union as soon as you get your title with from the Department of Motor Vehicles.   In most instances Missouri Central can save you money over the life of the loan.

There are a number of situations that could call for you to take a look at refinancing your vehicle loan. The way that auto loans are set up, the majority of the interest is paid during the first half of the loan, so the closer you are to the beginning of your loan, the more money you could potentially save by refinancing to a lower interest rate.

• If interest rates have dropped since you purchased your vehicle, it could be a wise idea to check into what interest rate you could get, just a percentage point or two could end up saving you a substantial amount over the life of the loan.
• If your credit score has improved, it would be a good idea to look into an auto loan refinance in order to get a lower interest rate. Several months of continuous on-time payments can be enough to build, or repair, your credit history to qualify for a lower interest rate.
• Your personal financial situation has changed for the worse. By refinancing your auto loan may be able to extend the life of your loan, which would then lower the monthly payment on your loan.
• You current lease on your vehicle is expiring and you wish to purchase the vehicle.

Many financial experts recommend that your total vehicle expenses should be 20% of your monthly take-home pay. Total vehicle expenses are the total cost to own your vehicle, such as your monthly auto loan payment, car insurance, yearly registration fees, gas, maintenance, and repairs. So as an example, if your monthly take-home pay is $3,000, 20% of that is $600. Now, that doesn’t mean that you should go out and purchase a car that leaves you with a monthly payment of $600. The total of all the other incidentals previously mentioned that go along with owning a vehicle should total $600 or less. It is important to remember that this 20% is only a guideline. Your individual budget and non-vehicle related expenses will determine how much you can actually afford.

A down payment isn’t always required on an auto loan, but it is usually a good idea.

By putting money down, you decrease the dollar amount that you need to finance, which will lower your monthly payment. Financing a smaller amount may get you a lower interest rate, which may decrease both your monthly payment and the total cost of the loan.

A down payment doesn’t have to be cash brought to the transaction. Trading in an older vehicle serves the same purpose. The agreed upon value of the trade-in vehicle is deducted directly from the sale price of the purchase price. Cash rebates offered on new vehicle purchases function the same way.

If you find that the value of your car is near or more than your loan balance, low-cost gap coverage can bridge the gap between your loan payoff and your auto insurance payout if you total your car during the life of the loan.

Many people spend weeks or months researching the type of vehicle they will purchase; they want to make sure they are getting the best deal around. But too often people neglect to do any research on the loan they will use to purchase that vehicle. Making sure you are getting the best loan is just as important as the vehicle you are buying. If you are not careful with the loan you take out, you could end up spending thousands more over the course of the loan.

Both the interest rate and the length of the loan play a key part in determining the total cost of the loan. A longer term can lower the monthly payments, but in the end the loan will cost more because of the additional interest you will pay in the extra months, or years it takes to pay off the loan. The key is to balance the monthly payment and length of the loan. By keeping the loan as short as possible, while keeping the monthly payment at a comfortable amount that you can afford, you can minimize the amount of interest you pay over the course of the loan.

If you are applying for an auto loan with multiple lenders, you should try to keep it confined to a 2-week period. Multiple checks of your credit can have a negative impact on your credit score if you apply over the course of many weeks or months.

It is a good idea to check your credit report to verify the information it contains. Your credit score is determined by the information in your credit report and most lenders use your credit score to determine your interest rate.  You can pull your credit report from each of the three credit bureaus once a year for free, this gives you the opportunity to correct or dispute any incorrect information that may be having a negative effect on your credit report. Ensuring your credit report is accurate and your credit score is as high as possible is a great way to make sure you are getting the best auto loan available.

There are many options when it comes to the length of your auto loan. You can finance your vehicle for almost any terms you choose. The benefit of choosing a longer term is that it lowers your monthly payment. But, when you choose to save money monthly by extending the terms of your loan you can end up spending a substantial amount more because of the additional interest you will pay over the course of the loan.

When you choose a longer term on your loan, you not only pay more in interest because of the length of the loan, a longer term often comes with a higher interest rate.

When you choose a longer length loan you also run the risk of having negative equity in your vehicle for longer. This means that you will owe more on the vehicle loan balance than the vehicle is actually worth in re-sale value. This becomes a problem if you total your vehicle.  The payoff the insurance would offer would likely be less than what you actually owe.  Or if you were to decide to trade your car in on a new vehicle, you may owe more than the vehicle is worth.  The negative equity is added onto the principle of the new loan, which compounds the problem of being “upside down” on your loan to vehicle value ratio.

It is in your financial best interest to choose the shortest loan length possible. You will pay less in interest because of the longer term, but also because of the interest rate offered to you based on the length of the loan.

It may be possible to include the sales tax on your new vehicle in your auto loan depending on the value of the vehicle in relation to your purchase price.  We can help you determine if that is an option.