Here are the questions we hear most often from members. If you still have questions or would like more information on any of the topics listed here, we'll be happy to help. Please give us a call at 434.237.1566.
How much will my monthly vehicle payments be?
Your monthly payment will depend on the size and terms of your loan. You can calculate the size of your loan using calculators at bankrate.com. The monthly payment should be no more than what you can realistically afford. Keep in mind the additional costs associated with owning a vehicle such as insurance, registration, and maintenance which are not factored into your monthly payment.
Should I finance or pay cash?
Many people cannot afford to pay cash up front when purchasing a vehicle, but even for those who can, financing may still be a wiser option. Although you do not pay any direct financing costs when you pay with cash, the money you take out of your savings or investment portfolio has an "opportunity cost." An opportunity cost is the benefit you sacrifice by not using that money for something else such as the return you would have earned on an investment. For example, if you take $15,000 out of an investment that earns you an average 8% ever year to pay for a vehicle, the opportunity cost after five years is just over $7,000. Depending on the terms of your loan, that loss could be greater than the interest you would pay on your auto loan. Before making a decision, be sure to weigh out all your options.
Which is better? a rebate or special financing
Sometimes, automakers offer special financing to boost sales. For example, many automakers offer zero-percent financing at different times, which is an interest-free loan for the life of the loan term. However, zero-percent financing is often only available to qualified buyers with excellent credit histories. If you do not qualify for zero-percent financing, you should ask a lender about acquiring a loan with a low interest rate. While low interest rate loans and rebates are both designed to boost auto sales, depending on your circumstances, one may turn out to be a better deal. While a rebate is acquired immediately and allows you to take out a lower initial loan, a low interest rate may save you money over the long term. Use an auto loan calculator (an easy to use calculator can be found here) to help evaluate the best option for your purchase. Better yet, try to get the best of both worlds ask the dealer for a cash rebate and get low rate financing through Beacon Credit Union.
How much can I borrow?
You may borrow up to 100% of the value of your car. This allows you to finance the entire purchase price.
What is considered a "New Auto" versus a "Used Auto"?
At Beacon Credit Union, we loan you money based on the current value of the vehicle to be financed and your credit rating at the time of the loan. It's just that simple. Other financial institutions use complicated methods to separate "used" from "new" vehicles, usually to make more money on the loan. At Beacon, we make it a lot easier to understand how your loan works.
When is my first payment due?
Your first payment is due on the 30th of the month following the close of the loan. For example, if you close your loan during September, your first payment will be due on October 30.