Purchasing a car represents exciting and meaningful milestones for all buyers. Whether it is a first-time car purchase, an upgrade, or buying a new or used car for a loved one, it is natural to have questions about auto loan financing. Auto loans bridge making a large vehicle purchase possible over time. The experts at Common Trust Federal Credit Union shine a light on what you need to know when buying a car and what financing options are available to get you and your family on the move.


Things are looking up in these times, and the automotive market appears to be making a solid comeback from COVID-19 with good deals blooming. At Common Trust, we encourage our members to shop around for a deal that suits your lifestyle and to pay particular attention to interest rates, contract length, payment amounts, and car value overall.

Budget Assessment 

From SUVs to Sedans to trucks, your car needs will require financing considerations ahead of time. Before you take out a car loan, we will help you learn how interest rates work to get the best deal on your loan. The best guide for your budget parameters is the 20/4/10 rule. We recommend putting 20% down, committing to a 4-year loan term, and ensuring that your loan does not exceed 10% of your gross annual income. When finalizing your budget, remember to factor in gas, insurance, and potential maintenance costs. 

Direct vs. Dealer Financing

85% of buyers elect for some form of financing. Both direct and dealer financing are available, and both have their unique advantages. Direct financing allows for more competitive rates as some institutions offer discounts to customers. Dealer financing may allow for flexibility if you are working on building your credit. Direct financing means your monthly payments are sent directly to the lender. Dealer financing means a dealer sells the loan contract to a financial institution, like a bank or credit union, and that institution then collects your payment. 

New and Used Car Loans

Common Trust offers auto loans for both new and used cars. We provide up to 120% financing on your new car or truck purchase for up to 7 years. For new and used vehicles, we will provide up to 120% financing of the NADA (National Auto Dealers Association) Retail value of your used car or truck purchase. We also finance vehicles up to 7 model years old, and in some cases, older. 

Get started

Now that you set your budget, gathered all of the necessary documents, and compared financing options, you are ready to apply for a loan. If you are not already a member, you will need to join Common Trust as a member before applying for an auto loan. Click here to become a member. If you are already a member, you can submit your application using your account number or Home Banking login information. 

We are committed to providing our members the opportunity to save in meaningful ways as we emerge from these challenging times. Common Trust is pleased to offer special rates as low as 1.99%* on auto loans until June 30, 2021. Click here to learn more about this Auto Loan promotion, and we look forward to assisting you.