Auto
PenFed charges under 2% for 48-month auto loans
Pentagon Federal Credit Union is offering outstanding new auto loans for as low as 1.99% APR for up to 48 months.
That's a huge discount of more than three percentage points off the average cost of a 4-year new-car loan. The average APR on 48-month loans is 5.16%, according to our latest national survey of lenders.
If you have a more expensive loan on a 2011 or 2012 model auto through another lender, PenFed also offers refinancing at 1.99% APR.
The credit union’s rates for used-car loans caught our eye, too. It’s still the same low rate --1.99% APR -- for up to 48 months.
We rarely see used-car rates that are as low as new-car loan APRs. In fact, the average loans are more than 6%.
If you finance $15,000 for 48 months at the national average rate of 5.16%, your payment would be about $347. But if you borrow $15,000 at PenFed’s rate of 1.99% APR for a 48-month loan, your payment would be about $325.
Taking advantage of the more affordable rate can save you $22 a month or more than $1,000 over the 4-year loan period.
Use our auto loan calculator to help you budget what your monthly payment could be.
If you need a longer financing term, PenFed has 5-year auto loans for as low as 2.49%, still well below the national average. That's the same rate this credit union offered when last we wrote about its auto loans in July 2011.
The country’s third-largest credit union offers 100% financing, which means you don’t have to come up with a down payment to qualify.
Search our database of the best auto loan rates from several other lenders in your area to see if you can find a better deal.
You have to be a member of the Alexandria, Va.-based PenFed in order to take advantage of these auto loan rates, but that it isn’t hard to do.
If you are a government employee, work for a defense contractor or have ever served in the military, you could probably join PenFed by placing as little as $5 in a share account.
You can also become a member of the credit union by making a one-time $15 donation to Voices for America’s Troops or a one-time $20 donation to the National Military Family Association.
Members must borrow at least $7,500 for a new car to get the low rate on a 4-year loan and at least $10,000 to get the best auto loan rate for a 5-year loan. There is no loan origination fee.
Members also have to arrange the loan through the credit union’s website to get the lowest rates, which apply to loans of up to $70,000.
Knowing about PenFed’s auto loan rates before you walk into a car dealership can help you negotiate with the dealer’s finance manager. Either the manager can beat the affordable rate, or you go with PenFed’s offer. Either way, you’ll know you can score a good deal on financing.
If you’re in the hunt for a new auto, use our 5 simple steps to the best deal on a new car or truck. You can learn how to shop smart and drive home a real bargain.
If you’re shopping for a preowned car, follow our 10 smart moves for buying a used car to help you avoid costly pitfalls.
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