Advertised Vs. Actual Rates
With the current financial environment, it is essential to be informed when shopping for a vehicle. One thing to be on the lookout for is advertised rates that require additional purchases.
For example, you may see an advertisement that says, "Rates as low as 3.00% APR," but when you look at the rate you are offered, it is much higher. Many institutions require you to make an additional purchase, like a warranty or finance for a shorter term as short as 24 months, to receive the advertised discounted rate.
The danger of these practices is that the cost to “buy down” your rate can outweigh the benefit you gain from the rate discount.
What is a good APR for an auto loan?
A good APR is one that keeps your monthly payment within your budget!
HPCU's auto loans start at 3.24% APR for 0 - 60 months, and we do not require any additional purchases or actions for members to get their credit-qualified rate.
Look closely at the disclosures where the rate is advertised. If you see any of the typical rate discounts below, the advertised rate will most likely require you to take additional action to achieve that rate.
Typical Rate discounts to look for when shopping for a new vehicle:
- Rate Buy-Down with Loan Protection Services
- Multi-Product Discounts
- Shortened Terms
- Small Credit Tier for Lowest Rate
- Automatic Payment Discounts
At the end of the day, the most important thing when determining if you should go with a lender is what’s going to be best for you. Explore all your options before making a decision so that you leave happy and ready to enjoy your new car!