Wheels and Deals: Finding an Auto Loan That’s Good to Go

Buying a car can be exciting, but don’t lose sight of how you will pay for it. Here are our latest tips on financing a vehicle through an auto loan.

Review your credit reports long before you go to purchase a car. Correcting inaccuracies, such as an erroneous history of late payments, can help you get the best loan possible. Fixing mistakes may also save you money on car insurance.

To request free copies of your credit reports, go to www.annualcreditreport.com or call 1-877-322-8228. This is the only authorized site to obtain your free credit reports.

Consider getting pre-approved for a loan from at least one financial institution before you go to the dealership. A financial institution, such as one where you already have an account, may offer you a better interest rate than what you get offered through the dealership. And, don’t share with the dealer the interest rate you’ve been offered in case you want to explore loan options at the showroom.

Consumer advocates also suggest that you not even tell the dealer whether you’ve already been pre-approved for a loan until after you’ve negotiated the purchase price. That’s because some dealers may be less flexible on the price of the vehicle if they don’t expect to make money on the financing.

Don’t hesitate to seek different financing offers. You may be surprised by how comparison shopping for an auto loan can save you money. While submitting multiple loan applications generally can slightly lower your credit score, those for car loans made within a short period (such as 14 days, according to some credit scoring models) generally are grouped together to minimize the effect.

Compare loan offers based on the Annual Percentage Rate because the APR includes certain fees as well as the interest rate. “The size of your monthly payment is important, but resist attempts to focus your attention on the monthly payment instead of the APR,” said Luke W. Reynolds, Chief of the FDIC’s Outreach and Program Development Section. “Remember, the APR reflects the true cost of the loan.”

The longer your loan, the more you pay in interest. “Long-term loans may lower your monthly payment but you will pay more in interest over the life of the loan,” Reynolds added. “You may even be offered a loan that is longer than you expect to keep the car.”

Keep good records of your loan quotes. Before signing on the dotted line, review the loan agreement (the contract) and make sure any potential fees, the interest rate, and other key terms match what you were initially told.

Don’t allow anyone to steer you toward a larger purchase and a bigger loan than you will be able to comfortably pay. In addition to your monthly loan payment, you need to budget for the cost of auto insurance, licensing fees and taxes.

Leave the car at the dealership until your loan terms are finalized. If a dealer offers you a “contingent” or “conditional” loan agreement and lets you drive the car home, the loan terms may change and be less advantageous for you when you return to finalize the purchase.

If you have a problem with your lender or its debt collection practices that you can’t fix on your own, help is available. Consider filing a complaint with the Consumer Financial Protection Bureau at https://help.consumerfinance.gov/app/vehicleconsumerloan/ask.

For more information, see articles in the Fall 2012 issue of FDIC Consumer News (www.fdic.gov/consumers/consumer/news/cnfall12/autoloans.html) and the Spring 2012 edition (www.fdic.gov/consumers/consumer/news/cnspr12/autoloans.html). The Federal Trade Commission also has resources at www.consumer.ftc.gov/articles/0209-buying-new-car.

Reprinted from FDIC Consumer News Winter 2015 https://www.fdic.gov/consumers/consumer/news/cnwin15/autoloans.html

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About Union State Bank

Honesty, integrity, commitment; hometown values that are our way of doing business. At Union State Bank our mission is to be the preferred, locally owned bank committed to providing exceptional service to achieve long lasting customer relationships. The Union State Bank has been serving the banking needs of our community since 1911, when the Farmers and Merchants State Bank was formed in Kewaunee, Wisconsin. The Bank’s slogan was "A Bank of the People, By the People and For the People - A Bank For All The People," and invited the community "if you are not a customer, become one, and we assure you that your interests will be protected in every legitimate manner." In 1934 the Farmers and Merchants State Bank consolidated with the Dairyman’s State Bank, which was located across the street, and the Union State Bank was formed. It was reported in the local paper that "The union of two banks is particularly for the benefit of depositors. All the experience, ability and training gained through many years of banking service is combined here primarily for your protection. The confidence that has been cultivated over past years is now being strengthened." We have continued to grow through the years, and slogans used include "Union State Bank, where rail and water meet" and "Union State Bank, the bank and a half, we give you our all and then some." We currently have four locations. We have two offices located in Kewaunee, Wisconsin which is along the shores of Lake Michigan, approximately 20 miles east of Green Bay. We also have an office in Green Bay, Wisconsin and an office in Two Rivers, Wisconsin. Our main office is located at 223 Ellis Street in Kewaunee. Our second Kewaunee location was established in 1996 and is in the Piggly Wiggly grocery store. Our Green Bay office was established in 1987 and in September of 1999 we completed an addition to that location. In April 2004 we opened our office in Two Rivers. Originally situated inside the Pick 'n Save grocery store, the Two Rivers office was relocated to a brand new building at 2221 Lincoln Avenue on April 21, 2009. We have certainly grown and changed over years, but one thing remains constant - our commitment to our customers. We are proud to be the only independent bank in Kewaunee, which allows us the ability to offer a wide array of services that are designed to meet the individual needs of our customers. We offer full-service banking from an experienced, dedicated staff of full-time employees. We still believe in the "personal touch," and enjoy getting to know our customers. Even though we are a small, locally owned bank, we offer the latest in technology services, including our website and 24-hour account access via our "Union Access" line. We are proud of our long history of high-quality, personalized service, and invite you to become a customer of Union State Bank. See how "We Make the Difference" for you.
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