Auto Loans

Buying a car in 2021

The 2021 car market has been tough for those searching for a new or used car. Low dealer inventory, a global microchip shortage, and consumer demand are making it increasingly difficult and expensive to shop for new and used vehicles.

According to Edmunds, used cars are more desirable to customers who either can’t find what they are looking for or want a cheaper option. With lower inventory and spiking demand, dealers have little incentive to offer discounts on any of their cars.

Although finding the perfect car right now can seem challenging, there are still plenty of ways to get behind the wheel of your new ride. Visiting a lot and purchasing directly from the dealer is the traditional way to buy a car, but there are alternative options now. You can even get pre-approved through a local credit and search for the perfect ride online.

Shopping for cars online is a popular choice, especially now. Most credit unions incorporate car buying services with their memberships, which is a helpful member benefit. But if you want a concierge experience, exploring a door-to-door service, like Carvana, can be appealing. Unfortunately, going through a more convenient option could cost quite a bit more when fees are included. According to The Balance, concierge services typically charge an upfront fee, as well as a percentage of the savings found. These extra fees could cost up to an additional $1,000 so weighing the convenience and investment costs is a smart budgeting practice.

No matter how you buy your new or used car this year, set reasonable expectations for the market we are currently in, keep an open mind, and exercise patience during your search.

Car Buying Tips in 2021


With ultra-low dealer inventory and a global microchip shortage, car buying is a challenge this year. Here are some helpful tips from the experts at Edmunds on the best way to plan ahead:


  • Research market prices and realign your expectations – The market has changed, and the killer deals of years past just don’t exist right now. Once you know today’s market price, you can shift your expectations and paying sticker price for your new car won’t come as such a shock.
  • Expand your search – If you aren’t satisfied with the selection in your area, broaden your search to neighboring towns and counties. By casting a wider net, you might find a better car or even a better deal.
  • Be flexible and have a backup – Don’t fixate on one specific car color or brand. If you have narrowed down the model you want, look at equivalent brands and other colors to find the best deal. Also, keep backup models in mind in case your search comes up empty.
  • Consider a sedan – Trucks and SUVs are by far the most popular vehicles on the road today. Consider finding a sedan to buy, which could be easier to find and much less expensive.

  • Don’t rule out a new car – If you’re set on buying used, consider looking for a new car. Similarly, if you’re shopping for a new car, don’t rule out used ones. Keep your options open to find the perfect vehicle for you.

Get the most for your trade-in – Since the market is up, that means your current vehicle is also worth more. If you’re trading in your vehicle, it could go a long way toward a newer, higher-priced vehicle

Car Shopping

Five Ways to Turbo Charge Your Car Shopping Process

More than 23 percent of Ohio consumers are considering purchasing a vehicle this year, and 83 percent are more likely to finance the purchase than pay cash, according to a consumer survey conducted by the Ohio Credit Union League.
When asked what factors respondents considered when vehicle shopping, 67 percent said monthly payment is the biggest influence on their decision. For 61 percent of participants, gas mileage is the most important issue, while 47 percent said consumer reviews are important in their decision-making process. Other aspects considered when shopping for a vehicle included a safety rating, vehicle’s history report, and general aesthetics.

It’s no surprise gas mileage is at the top of consumers’ minds. According to Time Magazine’s Everyday Money, after a slight gas-tax increase (to 31.3 cents per gallon) took effect Jan. 1, the average cost of a gallon of gas in the Buckeye State is $2.03. Up from $1.49 a year ago. The national average for gas sits at $2.29 per gallon, according to AAA. That’s 29 cents more than the national average at this time last year.

In addition to the cost at the pump, here are a few tips when choosing a new vehicle that will have the least effect on your wallet.

• Use your tax refund. The more money you’re able to put down on a car, the smaller the loan and ultimately, the less you pay in interest over the life of the loan.

• Get pre-approved. Before car shopping, get pre-approved. It’s fast, free and online at ProMedica FCU. Pre-approval will give you more power to negotiate on the purchase price of the vehicle. Pre-approval also tells you how much you can afford and what type of monthly payment you will have.

• Budget ahead. As a rule-of-thumb, do not allow a monthly payment for a vehicle to exceed 12 to 16 percent of your gross monthly income.

• Consider the total cost of ownership. When car shopping, consider the cost of insurance and maintenance. Also, keep in mind that a high-end vehicle typically costs more to insure and maintain.

• Check with ProMedica FCU. Rather than purchasing items like a warranty and Guaranteed Asset Protection (GAP) coverage at the dealership, check with a credit union. PFCU offers these items at a lower cost than what you would find at a dealership. 

To learn more about how PFCU can help you afford life, stop into one of our four locations or call 419-479-4040.

*Pre-approval based on individual credit worthiness using ProMedica FCU risk based criteria. Pre-approvals are valid for 30 days. Not all applicants will be pre-approved.

Car Value

These Vehicles Have the Best Resale Value

A great deal on a new vehicle will only stay great if the operating costs remain competitive, and the resale value is strong at trade-in time. A new report from Kelley Blue Book examines the latter.
KBB recently ranked vehicles on resale value, and awarded top honors to the best 10.

The company’s annual Best Resale Value Awards recognizes vehicles for their projected retained value through the initial five-year ownership period.

In general, trucks and SUVs dominate in this category. Vehicles in these categories simply hold onto their value due to ever rising demand. But all are not equal in this respect.

Toyota earns top honors for Best Resale Value Brand, a designation it last received in 2014, claiming four 2017 model-year winners.

Porsche captures the Best Resale Value Luxury Brand title for the first time ever with three model winners.

Other notable automakers among the list of 2017 Best Resale Value Award winners in 22 different categories include General Motors with an impressive seven models taking honors for its Chevrolet and GMC brands, Honda with four model winners, and Subaru, last year’s best brand winner, with four 2017 Best Resale Value Award wins.

Lexus, last year’s best luxury brand award winner, has four models winning this year’s awards and is the only other luxury brand on the list in addition to Porsche.

Here are the winners:
2017 Best Resale Value: by Vehicle Category
Subcompact Car: Honda Fit
Electric Vehicle: Chevrolet Bolt
EVCompact Car: Subaru ImprezaSubcompact
SUV/Crossover: Honda HR-V
Sporty Compact Car: Subaru WRX
Compact SUV/Crossover: Jeep Wrangler
Mid-Size Car: Subaru Legacy
Mid-Size SUV/Crossover: Toyota 4Runner
Full-Size Car: Nissan Maxima
Full-Size SUV/Crossover: Chevrolet Suburban
Entry-Level Luxury Car: Lexus RC
Luxury Compact SUV/Crossover: Porsche Macan
Luxury Car: Lexus GS
Luxury Mid-Size SUV/Crossover: Lexus RX
High-End Luxury Car: Porsche Panamera
Luxury Full-Size SUV/Crossover: Lexus LX
Sports Car: Porsche 718 Cayman
Mid-Size Pickup Truck: Toyota Tacoma
High Performance Car: Ford Mustang Shelby
Full-Size Pickup Truck: Chevrolet Silverado HD
Hybrid/Alternative Energy Car: Honda Accord Hybrid
Minivan: Toyota Sienna

2017 Best Resale Value: Top 10 Cars
Chevrolet Colorado
Jeep Wrangler
Chevrolet Silverado
Subaru WRX
GMC Canyon
Toyota 4Runner
GMC Sierra
Toyota Tacoma
Honda Ridgeline
Toyota Tundra
For your auto financing needs, think ProMedica FCU. We are your Loan Connection.


New Vehicle Prices Continued to Rise All Year

New vehicle transaction prices rose steadily throughout 2016, reaching a record level in December.
The average paid for a new light vehicle in December was $35,309, according to Kelley Blue Book.

KBB said that new-car prices increased by $521 (up 1.5 percent) from December 2015 to December 2016.

They rose by an alarming $166 (up 0.3 percent) just from November to December.

Tim Fleming, an analyst for Kelley Blue Book, points out that manufacturer incentives have grown to counterbalance the increased prices. In other words, consumers don’t really feel the increases in most cases.

Low interest rates have also contributed to this phenomenon, since lower-interest auto loans also help to shield vehicle price increases from consumers by keeping monthly payments low.

The party has to end at some point, though. There’s a limit to how far vehicle manufacturers can go with incentives and still make money on their products.

Also, rising interest rates will eventually start pushing monthly payments higher.

At some point, consumers will look for more affordable vehicle options.

Look to ProMedica FCU for your auto financing needs. Whether you are looking for a new or used vehicle; ProMedica FCU has some of the lowest rates in the area. Get pre-approved before you shop at the dealer. Utilize our convenient online application process, or stop into one of our 4 locations. We are dedicated exclusively to ProMedica employees, immediate family members, and the affiliates of ProMedica.

Car Sales

Car Sales Heat Up This December

New vehicle sales are slowing, and that could mean bargains in 2017.

December is shaping up to be the biggest month for new vehicle sales in all of 2016, according to new data from Kelley Blue Book.
The venerable auto valuation source said that December 2016 new vehicle sales should clock in at 17.4 million seasonally adjusted annual rate (SAAR).

This would make December the biggest month for sales all year.

However, new-vehicle sales are expected to be down 2 percent from December 2015.

Kelley Blue Book said it expects further slowdowns in 2017, and its experts’ forecast calls for sales in the range of 16.8 to 17.3 million, which would represent a 1 to 3 percent decrease from this year.

Are you smelling bargains in the air? You should, because if this prediction for slowing sales comes true, dealers will be holding a lot of excess inventory in the early months of 2017.

So, before you buy your next vehicle, be sure you talk to us first. ProMedica FCU has some of the lowest rates in town on new and used cars.

If you have questions about our auto loans, call us at 419-479-4040, or stop by one of our convenient locations. You can also apply online. Just click apply at the top. Get pre-approved before you shop!

Auto Loans

Refinancing Auto Loans 101

If you’re paying too much in interest on your car or truck loan, refinancing could be a great way to save some serious dough. Interest rates for vehicle loans may have dropped since you financed your auto. Or maybe you’ve improved your credit score, which could qualify you for a lower rate. Either way, it could be worth hundreds of dollars in savings to get a new auto loan to replace your current one.

The process is fairly simple. You’ll need to contact your current lender to get your loan’s payoff information. Then, you can apply for financing from a new lender that offers a lower interest rate. You’ll typically be asked to provide recent account statements, W-2s or other proof of income, and give permission for the lender to run a credit check. You can usually receive a response within a day. Once approved, the funds can be sent to pay off your existing loan, and the title would be transferred to the new lender.

Money-saving scenario

Suppose last year you financed $25,000 at 8% interest for a five-year car loan. Your monthly principal and interest payment would be about $507. But say today you could refinance the balance (just over $20,000) for the remaining four years at a lower rate of 3%. Your payment would drop to $451. That’s a savings of $56 a month, or $2,688 over four years, with the same payoff date.

You could also refinance for a longer loan term. This could reduce your monthly payment and give you more room in your personal budget. If your income drops or you have unexpected expenses, refinancing to a lower monthly payment could be one way to make sure you can pay your bills.

Choose carefully

For all the potential positives of an auto refinancing, there could be some drawbacks. If the new loan pushes your payoff date further into the future, you could end up paying more money overall in interest. Also, any new loan may incur title and registration fees, which vary by state. If you do refinance, don’t forget to tell your insurer.

There could also be costs to get out of your old loan. If you have a prepayment penalty, or the lender requires you to pay all remaining interest upfront, it would reduce your savings from refinancing.

Some car loans are “frontloaded” so your monthly bill mostly pays for interest during the first part of the term. If you’ve had your existing loan for a few years, your remaining payments would mostly go toward principal. That means a refi, even at a lower rate, may not save you enough to justify the cost.
Be sure to add up all the fees for paying off your old loan. Then, compare that amount to how much you’d save with a refinance, and see whether the benefits outweigh the costs.

An auto loan refinance can be a smart move in the right situations. By receiving a lower rate, you could cut your interest costs, reduce your monthly payment and save big.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved.

Zero Percent

6 Questions About Auto Financing

Navigating automobile financing can be one of the biggest financial headaches you’ll encounter. But, unless you want to walk everywhere, it’s something you’ll have to deal with. The biggest hurdle is figuring out the angles and understanding the entities that stand to profit from the transaction. Let’s go through some of the more challenging parts of automotive financing by addressing some of the questions about automobile financing.

1) How do dealerships secure financing?
Car dealers usually have a department that is responsible for setting up financing and insurance (commonly referred to as “F&I”). These people take the estimated price of the car, the actual value of the car, and your credit history to a number of different credit providers. These include major national lenders, auto manufacturer financial departments, and depending on the dealership, some local lending institutions. These vendors each quote an interest rate and other fees.

Car dealers usually have longstanding business relationships with their lenders, which often include incentives for the dealer as a “reward” for financing a loan through that lender. Because the lenders are competing for the dealer’s business, not necessarily for yours, those incentives are for dealers and not consumers. While the dealer knows that lower interest rates make you more likely to buy a car, in this transaction, you’re not the customer. You’re the product. The dealer is trying to sell your business to a lending organization and usually makes a profit on the transaction.

2) When should I tell the dealership I already have financing?
Let’s be clear: Financing is profitable for dealerships in many ways. If they know they can’t turn a profit from financing, they’re more likely to push harder to find profit elsewhere. You’re almost always better off keeping the auto loan for the last part of your transaction with the dealership, particularly if you plan on securing outside financing. This doesn’t mean, though, that you don’t want to think about financing until that point in time. Discuss your plans with a representative at ProMedica Federal Credit Union (PFCU); including the type of vehicle you are planning to purchase. Discuss what rates PFCU can offer. By doing your research ahead of time and knowing what financing options are available to you, you can let the dealer think there’s still money to be made in the financing, which may strengthen your negotiating position on other parts of the transaction, like the price of the car or the value of the trade-in.

3) How do dealerships make money offering 0% financing?
If you’re shopping for a car because you’ve seen an advertisement for 0% financing, you’re not alone. Campaigns that offer manufacturer’s deals like 0% financing for 60 months are incredibly popular for car buyers and dealers alike. If it were honestly a losing proposition for the manufacturer, they wouldn’t keep doing it. This might invite you to ask how they could possibly make money on the financing. The answer is two-fold: volume and selectivity.

The volume part of the money-making strategy is simple. 0% financing gets people on the lot and encourages them to think about buying a specific brand of car. The manufacturer and the dealer both make money on each car sold, so the 0% financing trades some profit per car in the hopes that they’ll make up for it in number of cars sold.

Selectivity is the other side of volume. Not everyone who comes to a 0% financing event will qualify for that rate. Because most people who get to the point of discussing financing have decided to purchase a car, they’ll settle for a non-zero rate when it’s presented to them. Between these two strategies, advertising 0% financing does pretty well for a car dealer.

4) Does my salesperson benefit from financing my car purchase?
This really depends on the dealership. Most of the time, your salesperson only benefits from the price of the car, the warranty, and some high-markup items, like undercarriage treatment, upgraded tires, and other products. The financing department – the people who are responsible for getting quotes and delivering them to the salesperson – is likely to be the folks who receive any kind of commission on the financing. In these instances, it’s also very likely that the salesperson with whom you’re dealing has little to no control over your financing. He or she might be able to go back to the financing department and ask them to attempt to negotiate a better rate, but this negotiation may not have much success. In any case, someone at the dealership profits from getting you a loan.

5) What is GAP insurance, and is it right for me?
“GAP” or guaranteed asset protection insurance is automobile insurance that covers the difference between the total amount of the loan and the value of the car. It provides protection against the worst-case scenario, that you total a car (or the vehicle is stolen) and you owe more than it is worth. Your comprehensive insurance coverage will only pay out the value of the car, leaving you on the hook for the remaining interest and finance charges. A dealer may require you to purchase GAP insurance as a condition of financing your purchase. The cost of the insurance is almost always paid up front as part of the financing charges.

GAP insurance is designed for long-term, high-interest, or low down-payment financing. If you are buying a car without putting a lot of money down, or if your credit history is not stellar, you should consider getting GAP insurance. But, like any other purchase, you should shop around. Because most financing arrangements require you to purchase GAP insurance, dealerships maintain institutional arrangements with insurance agencies, expecting you to purchase it without much thought. It’s one last effort to make money off your purchase, and they rely on you to not notice. PFCU’s Gap insurance rates are about 50% less than what you would pay at a dealer. Please contact us for more information.

6) What steps can I take to avoid being railroaded by last-minute financing changes?
Financing is among the easiest places for dealers to make money, because it’s almost always the last stop in the car-buying process, and they expect you to be both committed to purchasing a car and exhausted from making a series of decisions. High-pressure salespeople use this fact to their advantage. When it comes time to talk financing, frequently, the license plates are off your old car, and you’re sitting down with a sales manager. While it may seem counter-intuitive, this is the best time to walk away and ask PFCU about financing options. See if PFCU if can offer you a better rate, lower fees, or a more flexible term. Ask the dealer to commit as much as possible to a price on an offer sheet. Then, tell them you’d like to take some time to think about it. If you come back with a pre-approval offer from PFCU, the sales manager may hem and haw a bit. But, at the end of the day, they’d rather make the sale than make a little extra on financing.

This is an especially important step if your history with credit is complicated. A giant lending corporation won’t see the steps you’ve taken to solidify your financial position. They don’t have the same relationship with you that PFCU does. They see you as a risk number and an interest rate they can justify, not as a Member of a community institution. Always give your Credit Union the first chance to beat the dealer’s offer – we work for you, not for a commission.