Ask an Expert: Pentagon FCU on DC Auto Loans
Buying a car is no small matter, but when you add financing to the equation, things can get really confusing. We asked Ben Scandlen of Pentagon FCU some common questions about Washington D.C. auto loans to make the process easier.
Washington D.C. Banking Rates: What are your top three tips for buying a car in DC?
Pentagon FCU: First, do your research online — many financial institutions, including PenFed, offer a car buying service that allows you to find a great deal, and avoid a lot of the hassles and haggles associated with the auto buying experience.
Next, consider a credit union for financing. A lot of people end up paying higher rates than necessary. Either they are not aware of credit unions, or do not realize they are eligible to join. Many credit unions offer great auto loan rates.
Finally, on your first visit to a car dealership, ignore the sales pitch — the objective of this visit is to evaluate your options, not to make an impulsive buying decision. Tell the salesperson that you’re not buying the car today. It is not necessary to talk price at this time. Likewise, you should not mention trading in your old car either.
The less said about your objective, the better. Don’t let them pressure you by offering a “today only” deal.
DCBR: If a person decides their Washington D.C. auto loan rate is too high, are options available to lower payments?
PFCU: While virtually everyone is familiar with refinancing their mortgage, not many people are aware that you can refinance your Washington D.C. auto loan into a lower rate.
At PenFed, we offer refinances on auto loans at 1.99% APR* online only. And the best part, there are no fees! It is probably the simplest way to save money. If you are paying more than 1.99% APR on your auto loan, you should absolutely refinance today.
DCBR: What is the biggest benefit of financing a Washington D.C. auto loan with a credit union, rather than a bank or finance company?
PFCU: The biggest difference is that credit unions are member-owned, not-for-profit institutions. If you are a member of a credit union, you actually own a piece of the credit union. This is important because as a not-for-profit, this means that your credit union is working hard to put YOU and other members first.
DCBR: What was your first car? How did you buy it, and why?
PFCU: My first car was a 1983 Honda Civic that I bought with $800 dollars in cash. I needed a car to get to work. As I recall, what made the purchase exciting was that it had a manual transmission — which I had never driven before — and the day I bought it, I actually had to drive to work that day. Let’s just say that was the longest five mile drive of my life. Otherwise, the car was great.
*Rate and offer current as of February 1, 2012 and are subject to change. Promotional rate is not available to refinance existing PenFed car loans. Rate applies to online applications only. Higher rate will be assessed if you do not apply online. Actual loan term and rate dependent on amount borrowed and term. Other conditions may apply.