Auto dealers are bombarding consumers with January sales offering cash rebates and 0% financing. Consumers would do better to check with their credit union for the best deal on new car financing.

The cars at the Detroit Auto Show are making news this week, but credit unions were in the spotlight nationally in December when NBC ran a Dateline NBC Special Investigative Report on the car-buying business. The hour-long network news show discussed how dealerships really operate and how consumers can survive that process. Credit unions' uniqueness drove the "how to do it right" portions of the report.

Two of the points made in the broadcast bear repeating, as consumers go searching for January savings:

1. Work with your credit union to get financing that’s better than the 0% deal.  In the Dateline segment, they even called the 0% phenomenon "legal bait and switch," and "a fantasy." While many consumers qualify for this rate, many more do not. Additionally, 0% and other low rate offers often apply to just a few models, or do not include certain options.

If your car manufacturer is offering a choice between a rebate and 0%, take the rebate, use it for your down payment and get a loan at your credit union for the lower amount. Your monthly payments could very well be less as a result. Here’s an example:

Few borrowers can afford these monthly payments. Another benefit to working with a credit union is that a variety of terms are also available. In the example above, extending the loan over a 60-month period results in a monthly payment of $424.

2. People trust credit unions. 

One car buyer featured in the Dateline segment first visited a car dealer, then went to the credit union for financing. She said of her visit to the credit union, "It was a completely different experience. They weren’t out to get my money. They wanted to help me."

This is indeed true and the shopper on TV is not the only one who believes it. Credit unions are not-for-profit, member-owned financial cooperatives. A survey released in October by the Consumer Federation of America and the National Cooperative Business Association notes that a significant majority of those who were surveyed agreed that cooperative organizations run their businesses in a trustworthy manner compared to investor-owned companies. When the same group was asked which kinds of businesses operate with the best interests of consumers in mind, significantly more respondents said it was the cooperatives.

As a member-owned organization, a credit union is also more likely to have a staff member available to go over financing options – including fine print—than an investor-owned bank or finance company would.

If you don’t have a credit union to call your own, visit www.icul.org and select "find a credit union."

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