Searching for the best car-financing options can be an intimidating journey and, if you have limited knowledge of the process, the outcome could be costly. Payment plans, interest, and contracts are rarely on the consumer’s side. So, how do you find the right financing when buying a car? And—most importantly—how can you avoid financing remorse? We spoke with the experts of Johns Hopkins Federal Credit Union to learn more about the car-financing process and how to close with the best terms.
How can you ensure that you’re getting the best deal when financing a car?
Research, research, research—do your best to protect yourself but also know that the credit union has your back. Johns Hopkins Federal Credit Union will validate the price of the car to make sure you don’t overpay, as well as help you determine which term best fits your budget.
What are the pitfalls of financing a car through the dealer?
Dealerships don’t always have your best interest in mind. Credit unions are a financial cooperative, meaning your interest is our interest. We want our members to be financially healthy and we look out for their wellbeing. Dealerships are known to sneak different fees and warranties in—so, if you do decide to finance through a dealership, be sure to read the fine print. Typically, dealerships charge more than double the amount a credit union would charge for insurance and other warranties.
How does Johns Hopkins Federal Credit Union offer a better financial solution?
Having a trusted partner like JHFCU can make the experience much easier. We’ll walk you through the entire loan process, so you understand what you are signing. Whether it is your first car purchase or you have bought multiple vehicles, we work to make it a good experience. Between 90-days of no payments, low rates, and special rebate programs (visit jhfcu.org for details) you get a great value, too.
How does a credit union like you differ from a conventional bank or auto finance company?
Credit unions typically give one-to-two percent lower interest rates on average compared to conventional banks. They are also known for offering better personal service because of the ownership structure and not-for-profit status.
What are the steps for refinancing a car?
Your lender will send you a 10-day payoff with per-diem (interest accruing daily). Once vehicle information is received by our JHFCU lending department, they will calculate the current value of the vehicle. It is then determined eligible for refinancing (with an LTV, or loan-to-value ratio, below 125 percent). We would then decide if the borrower is credit-worthy and in good standing with the credit union. Documents are signed digitally, making the process more convenient for our members. Once finalized, JHFCU mails a check to your old lender and you would begin to make payments to us.
JHFCU can refinance vehicles up to seven years old (must be 2012 or newer) and have under 125,000 miles. If your vehicle is older, there still may be some options to consider.
For those who haven’t purchased a car yet, what other options do you have to offer?
JHFCU has a great program that puts you in the driver’s seat: the Blank Check auto loan. You can apply to be preapproved and will receive a blank check good for up to your approved amount. It’s payable to the dealer and just like paying with cash. This gives you increased leverage for negotiating price, as you won’t be haggling over payments. Plus, JHFCU gives you a one-percent rebate for the loan amount.
What's involved in becoming a JHFCU member?
Our field of membership is composed of most of the Johns Hopkins’ organizations and affiliates, and we take pride in being part of this very special community. Once eligibility is determined you can open your account online, in person, or by mail. You must have a valid government-issued ID and eligibility verification. We do require a $25 minimum balance in the Share-Savings account, which will maintain your membership for a lifetime.