Pay less than 2% for a car loan this spring

Car key and fob on cash

Pretty much anyone can join Pentagon Federal Credit Union and take advantage of its very competitive car loans this spring.

Three-year loans for new cars and trucks are as low as 0.49% APR, and five-year loans are as low as 1.29% APR.

Those aren't rates you usually see, since the average 60-month, new-car loan costs 4.21%, according to our national latest weekly survey of major lenders.

The country's third-largest credit union is offering these low rates to its members who use the Pentagon Federal car-buying service and purchase a vehicle from an approved dealer.

The car-buying service allows you to see the prices others have paid for an auto, so you can negotiate with confidence at the dealership.

If you choose not to use the car-buying service, PenFed offers new-auto loans with rates as low as 1.49% for three years and 1.99% for 5 years — still less than half the national average.

Let's say you borrow $18,000 for five years at the national average of 4.21%. Your monthly payment would be $333. If you borrow the same $18,000 at 1.99%, you'd pay $315 a month and save $1,067 in interest costs over the life of the loan.

Up to 100% financing is available for both new- and used-auto loans, which means you don't have to come up with the down payment qualify. The loans are offered up to $100,000.

We think you'll have a tough time finding a better deal. But go ahead and search our database of the best auto loan rates from scores of other lenders in your area.

You have to be a PenFed member to get a car loan from PenFed, but it's not hard to join.

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Everyone who works for the government or a defense contractor, or has served in the military, is eligible to join based on their employment.

The rest of us can qualify for membership 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.

After qualifying, you would open a saving account for as little as $5 to establish membership.

The promotion is good through April 30, 2014, and you can only apply for the loan online.

The PenFed car-buying service is available in the continental United States and Hawaii. If you're in Alaska, then sorry, you're out of luck.

Then you can use our auto loan calculator to help you budget your monthly payment.

If you're planning to buy a new car soon, read our 5 simple steps to the best deal on a new car or truck to help you shop with confidence.

If you're in the market for a preowned auto, know our 10 smart moves for buying a used car. We can help you avoid the pitfalls of the used car market to find a reliable ride at a good price.

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