Auto Loans & Leases

 

 

You hope to keep driving your current vehicle for years to come. You'll enjoy it even more with a better auto loan. 

 

• At IMCU, you can refinance loans for cars, trucks, SUVs, motorcycles, RVs and more that you obtained from other lenders.
• Often times, we can lower your rate, reduce your monthly payment or shorten your loan term, depending on your goals.
• To get started, speak with a loan officer at one of our convenient branches.
• You can also apply for an auto loan online.

*While a lower payment is likely when refinancing a vehicle loan from another lender, it is not guaranteed and is based off the specific deal.

You've found a vehicle you want to buy. It looks great, but is it really road-worthy. A CARFAX report will let you know if the car, truck or SUV has an accident history, structural damage or other red flags.

 

• IMCU professionals will be happy to share a CARFAX Vehicle History Report™ with you.
• We'll debit your checking account $19.95 for each CARFAX report.
• Every CARFAX report lists title problems, ownership history, accidents and service records.
• CARFAX reports are based on information supplied to CARFAX. CARFAX does not have complete histories of every vehicle. 

*Subject to the terms and conditions on Carfax.com. 

Your vehicle is probably one of your biggest financial investments, perhaps second only to your home. It only makes sense to protect your finances with low-cost coverage should misfortune strike.*

 

• Mechanical Repair: Serves as an extended warranty that kicks in when manufacturer or dealer warranties expire. Covers the cost of major repairs to engines, transmissions and most other vehicle systems, potentially saving you hundreds or thousands of dollars in repair costs. 
• Debt Protection: A protection that helps you pay off your loan should the borrower die, become disabled or involuntarily lose their job. Payments may be paused, reduced or completely waived, depending on the circumstance. 
• Guaranteed Asset Protection: This coverage can help pay the difference between what your auto insurance covers and what you still owe on your vehicle loan if your car is totaled or stolen. It can help you avoid paying out of pocket for a remaining loan balance, giving you added peace of mind during the life of your loan.
• Debt Protection Waiver: This protection helps safeguard the equity you have in your vehicle if it is totaled or stolen and not recovered. It provides a benefit based on the difference between the vehicle’s value at the time DPW is purchased or enrolled and your remaining loan balance at the time of the loss.

Put simply, an auto loan provides the financing to help you purchase a new or used automobile. With an auto loan, you borrow money from a lender to pay for a vehicle up front. In return, you agree to pay that money back, plus interest and fees, over a set period of time.

Auto loans, sometimes referred to as car loans, are typically used to purchase a vehicle such as a car, truck, or SUV. However, many financial institutions, including IMCU, offer loans for other types of vehicles as well. For example, you may apply for an adventure loan (for boats, motorhomes, or travel trailers) or a motorcycle loan, along with traditional auto loans.

Before moving into the details of auto loans, it is important to establish a baseline meaning for several commonly used terms when discussing loans. Having an understanding of these key terms can make a big difference when it comes time to find and apply for a car loan.

 

• Lender: The lender is the financial institution that issues the loan. Typical lenders for auto loans include credit unions, banks, and indirect lending through dealerships. Which company is best for a car loan? The fact is, different lenders offer different services, APRs, and loan terms, so it is important to understand the costs and benefits of each option. For instance, dealerships offer convenience, but at a higher price.
• Interest Rate: The interest rate reflects only the percent of money you’ll pay each year in interest. Because the interest rate does not include fees, comparing APR rates is more informative than comparing interest rates alone. IMCU does not charge an auto loan fee, so the interest and the APR rates are the same.
• APR: Typically presented as an acronym, APR stands for annual percentage rate. APR refers to the total percentage you’ll pay to borrow money each year, including interest and any fees your lender assesses. The higher the APR, the more money you’ll pay in total. To find APRs, simply look for a lender’s auto loan rates. It is important to note that new car loan rates may differ from used car loan rates. Factors like your loan term and credit score may impact your APR as well. To find IMCU’s market leading auto rates, visit IMCU.com.
• Loan Term: Also referred to as loan length or loan duration, a loan term is the amount of time you will have to repay your loan. Loan terms are typically in 12-month increments, generally ranging from 36 months (or three years) to 84 months (or seven years). The longer the loan term, the more interest you will pay over the duration of the loan.
• Monthly Payment: Monthly payments are the amount of money you will pay each month toward your loan. Your monthly payments will go toward both principal and interest.
• Principal: For a loan, the principal is the amount of money you borrow, not including any interest or fees.
• Amortization: Amortization refers to the process of paying off your loan wherein a portion of your monthly payment goes toward principal and a portion goes toward interest. With most loans, your early monthly payments will send more money toward interest, while payments further down the line will send more money toward principal.
• Down Payment: When purchasing an automobile, you may want or need to provide a down payment. A down payment is simply the money you put down (or pay up front) toward the cost of your car. Down payments could be from your savings, or you may apply any money you receive from a vehicle trade-in toward a down payment. Down payments can lower your loan amount, which may mean lower monthly payments or the ability to pay off your vehicle more quickly.
• Total Cost: When you finance a vehicle, it is important to understand the total cost of your vehicle. This number will represent the principal amount plus the total amount of interest, fees, and taxes you will pay based on the terms of the loan. The total cost may also represent the total vehicle cost, which would include any funds put toward a down payment as well.

Car shopping can be an exciting time, but it can also be overwhelming and stressful. One of the most important factors when it comes to choosing a vehicle is how much you can afford. This is not cut and dry, however. Every individual’s financial situation is different, so what works for others may not work for you. Consider the following questions when determining how much you can afford to spend on a vehicle.

 

• What Is Your Take-Home Pay: One of the first things to consider when determining how much of a loan you can afford is your take-home pay. While some financial experts say you should spend no more than 10 to 15% of your monthly income on a car payment, others say 20 to 30% is doable.
• What Are Your Other Financial Obligations: Of course, that number may change depending upon how many other bills you pay each month. Consider all of your monthly expenses, including your rent or mortgage payment, student loans, utilities, cell phone bills, insurance, and more when determining your budget. When considering a long-term purchase like a vehicle, it is also important to consider future costly expenses like a wedding or the birth of a child.
• What Is a Good Monthly Car Payment for You: When determining how much you can afford to spend on a car, it is important to remember to be realistic and find a number you are comfortable with. How much do you want to spend each month on your car payment? How long do you want to be making car payments? While some individuals may be willing to have larger payments or longer loan terms, others may be looking to spend less over a shorter period of time.

For example, you might be wondering, “How much should I spend on a car if I make $60,000 per year?” That equals out to $5,000 per month in gross pay and roughly $3,685 in take-home pay. Assuming you want to stick with a monthly payment of 10-15% of your take-home pay, you might be looking for a monthly payment between $368.5 and $552.75. Once you’ve done those basic calculations, you can begin to compare it to your budget and any expectations you have in place.

As you’re doing the math, consider how much you’ll be paying in interest over time. If you can afford a higher monthly payment, you will end up paying significantly less in interest over the duration of your loan.

If you have an existing auto loan, you may be interested in refinancing it, or wondering if you should even consider it at all. Here are some times when it makes sense—and doesn’t make sense—to refinance.

• Your Credit Score Has Improved: Typically, the higher your credit score the better the APR you qualify for. If your credit score has improved since your loan originated, you may be able to refinance your loan for a lower APR. Doing so may mean you’ll pay less interest over the remaining months of your loan.
• You Want to Lengthen or Shorten the Loan Term: Looking for lower monthly payments by extending the term of your loan? Or, would you like to make larger monthly payments to pay off your loan faster? In either case, refinancing your loan may be the solution. For those looking for lower payments, do remember that the longer it takes to repay your loan the more interest you will pay.
• Interest Rates Have Dropped: If the U.S. auto loan rates have dropped since you finalized your loan, you may be able to refinance to qualify for a lower interest rate. Even a small decrease in the interest rate can save you money over the remainder of your loan.
• You’re Having Difficulties with Your Existing Lender: Sometimes, you simply wish to change your lender. Perhaps you’re dealing with frustrating customer service experiences, for example. Refinancing with a new lender like IMCU may alleviate some—or all—of these issues.

 

• Your Loan Has Prepayment Penalties: Some loan providers charge a prepayment penalty for paying off your loan early. If your loan has prepayment penalties, you should calculate how much the penalties will be and whether or not it is in your financial best interest to refinance.

 

We commonly hear the question, “Does refinancing a car hurt your credit score?” Just like with an auto loan, it may cause a small dip in your credit score, first when the potential new lender runs a hard inquiry and again if you accept the offer to refinance. However, these temporary dips in your credit score should resolve within a few months, once you’ve built up a history of on-time payments.