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What's the catch when a dealership offers lower APR financing than a credit union?
I've been shopping around for car loans and was told to always look at credit unions first. However, when I look at credit unions, their rates are around 4% while the dealer is running a financing special at 2.99%. Is there a catch to getting financing through a dealer?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Sometimes,
dealership
specials or those run by the automaker’s finance department can offer lower rates than credit unions. However, the devil is in the details.
You should keep a watchful eye to see if there are any
prepayment penalties
, as well as if the dealer can change your rate to something exorbitant if you miss a payment. There could also be a stipulation that you aren’t able to finance the vehicle.With a credit union, you won’t have to worry about these issues 99% of the time, but it’s important to review your contract.
You should always read the fine print and do your homework before signing a lending contract.
Don’t forget that your new car needs proper coverage. Use the free
Jerry
app to help you find the best deal. Jerry compares rates from the top 50 companies in under a minute, delivering the best deals to your phone.”View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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