Auto Dealer Financing vs. Credit Union
Shopping for a new car or truck is all about getting that perfect price – finding the deal on the vehicle that speaks to you. And while the overall price is important, it’s also important to figure out how to get the best deal on the loan you’ll use to finance this purchase.

Financing an Auto Loan
You can pay for car with an auto loan through your credit union or bank, or through the dealer themselves. A dealer would send your loan application to several financial institutions, who'll pull your credit report, and then send the dealer offers on interest rates.
If you go to a credit union or bank first, you can get preapproved for a loan up to a certain amount for your vehicle. These loans are also typically accepted by private sellers. See the auto loan approval process.
Start With Your Financial Institution
Talk to your credit union or bank before going auto shopping, to see what kind of a deal you can get on auto loan interest rates. You'd do this by applying for preapproval on an auto loan.
Financial institutions can run specials on these rates, so be sure to check through all your options. Interest rates will also depend on the age of the vehicle and the term (length) of the loan.
This preapproval is helpful once you get to a dealership to look at a cars, because you can compare it to the options provided by the dealer. You might even be able to get them to compete for your business by lowering their interest rates.
Then Compare
The most important first step you can take is being informed on all your loan options, so you can choose the one that fits your life the best.
Once you’ve got all your options in front of you, see which ones fit your budget. Figure out how much you’ll pay over the lifetime of the loan, and compare it to your other options. You might decide that one loan is better because it offers lower monthly payments, even if you wind up paying more in the long run.
A+ Tip: Use our calculator to figure out how much of an auto loan you can afford.
Buying a Vehicle, Your Way
Your situation's unique, so be sure to prioritize your budget and your needs. It might mean waiting to buy that dream car until you’ve got more financial breathing room, and that’s okay. Remember to work with what you’ve got to build toward the future you want.