MADISON, Wis. (2/3/15)--The Motley Fool recommends credit unions as consumers' best choice for auto loans this year in a recently published article on the personal investment website.
"Community banks fear them. Big banks think they can crush them. But over the years, the credit union has proved resilient.
"And unknown to most people, credit unions thrive by writing car loans," the article begins.
The article explains how credit unions operate under a not-for-profit structure that allows them to provide better interest rates on savings and loan products.
Car loans make up 32% of all credit union loans outstanding. "To win business, most credit unions price their auto loans at a fraction of the price that the nation's banks offer," the article stated. "It's not unusual for their rates to be 1%-2% lower than most for-profit banks."
On average, used-car buyers would save as much as $398 by using a credit union, while new-car buyers who pick the lengthiest loan term would save $1,220.
"But if there's one thing you should take away, it's this: Across the board, credit unions have much better auto-loan rates than banks do," the article concludes. "Over time, the difference can add up to serious savings--savings worth shopping for."