Let’s talk auto loans for a moment–a new study by the Consumer Bankers Association shows that 61% of new vehicle loans are for longer than 5 years. A key factor, they say, is consumers owing more than the value of their present vehicle and the rolling of that negative equity into the new loan…resulting in negative equity on the new vehicle. Not a good idea. The same study says that dealer markup on a new loan is 1.9% and 2.1% on a used car. Again, not good.

The answer?? Your Credit Union!! If they loan you money at 6% that’s it, no markup. If a car dealer can arrange a loan at 6%, the average rate passed on is 7.9%–Again borrow from your Credit Union!

And speaking of Credit Unions–notice how your Credit Union doesn’t have a lease program? That’s because it is a very poor way to buy a vehicle–yet in 2006 25% of new vehicle buyers leased—Boooo!!

Attend an Auto Buying 101 Seminar at your Credit Union to learn all about not leasing. Once you see it is black and white you’ll understand!