Unlike the other companies on our list, PenFed Credit Union is a credit union with physical branches in the Washington, D.C. area. The company offers auto loan financing for new and used cars, as well as auto loan refinancing. Benefits include excellent customer service and large loan amounts.
Flexible Loan Amounts
PenFed Credit Union offers the most flexible loan amounts of any company on our list. Its loan amounts range from $500 to $150,000.
First, most companies don’t offer auto loans lower than $5,000. Because of this, borrowers who need cheaper cars but can’t afford to pay cash may struggle to find financing. With PenFed, you can buy a car or refinance a loan even for a very small amount.
On the other end of the spectrum, PenFed offers loan amounts up to $150,000. Of course, most people aren’t buying cars for more than $100,000, since the average new car sells for $44,584.1 But those who are may struggle to find financing, since many lenders have lower maximum loan amounts. For this reason, PenFed is a great option for someone buying a brand-new, high-end vehicle.
If you buy a car at the higher end of PenFed’s range, the 72-month loan term can be especially beneficial. You’ll be able to spread your loan out over a longer period, which will lower your monthly payment.
PenFed Car Buying Service
A unique feature that PenFed offers is its PenFed Car Buying Service through TrueCar.2 With this service, you can shop for both new and used cars. You’ll choose the type of car you want, and the service will find one that’s available near you.
The PenFed Car Buying Service comes with several benefits. First, you can qualify for an interest rate discount that’s available only to buyers that use this service. For example, a new car loan from PenFed would normally have an interest rate starting at 5.84 percent. But when you use the car buying service, rates start at 5.59 percent.
Additionally, you can get members-only cash back from certain manufacturers. For example, as of February 2023, you can get a cash bonus of up to $2,000 when you buy a new Audi, $1,000 when you buy a new Mercedes-Benz, or $500 when you buy a new Dodge.
Additional Coverage Options
In addition to the standard perks that PenFed offers with its auto loans, there are a few add-ons you can purchase to make your loan even better:
- Gap insurance: First, PenFed offers gap insurance. In other words, if you’re in a total loss accident and insurance pays you out for less than your remaining auto loan balance, your gap protection would cover the difference. The one-time cost of this coverage is $445, and it’s available for both new and used vehicles with loans of less than $100,000 and terms of fewer than 84 months.
- Extended warranty: Next, PenFed offers an extended warranty with the same coverage as your manufacturer’s warranty for an additional six years, or until the vehicle reaches 100,000 miles. The warranty is available for models fewer than two years old and with fewer than 15,000 miles. The one-time cost of this coverage is $995.
- Debt protection: Finally, PenFed offers a debt protection program, which kicks in if your family experiences a financial setback and can’t make your loan payment. The debt protection program applies in situations like death, disability, and involuntary unemployment. If one of these situations arises, PenFed will cancel your loan or monthly payments without a penalty. Here are the three plans available:
|Cost per $1,000 of loan balance
While these add-ons will cost more money upfront, they can save you thousands of dollars, and points on your credit score, if you end up in a vehicle or financial emergency down the road.