7 Best Credit Unions for Car Loans

If you’re shopping for a new or used car, don’t overlook a local or national credit union. As member-owned institutions, they typically offer lower auto loan rates than banks or other lenders. For example, the average annual percentage rate (APR) for a 60-month new car loan at credit unions was just 3.72%, compared with 5.15% for banks, as of Q3 2022.

The catch with a credit union is that you must be a member to get a loan. Membership requirements may include living in a particular area or working for specific organizations or companies. However, some credit unions have nationwide membership availability, so joining may be easier than you think.

Best credit unions for auto loans

How we choose the best credit unions for car loans

We researched the 15 largest credit unions in the U.S. by assets as of July 2021 and chose the top seven. We considered the lowest-offered auto loan APRs, the membership requirements and the range of auto loan terms and amounts available.

Credit unions at a glance

SchoolsFirst Federal Credit Union

• Starting APR: 5.24% (with autopay)
• Loan amounts: Unspecified
• Loan terms: Up to 84 months

Based in California, SchoolsFirst offers competitive rates on all types of auto loans. You could find 100% financing for new or used cars purchased from a dealer or private seller, including lease buyouts. You could also get no payments for up to 90 days to give your checking account some time to recover after making a down payment.

Current and retired school employees and college students majoring in education are eligible to join SchoolsFirst. You’ll have to show a recent pay stub or a college transcript. Immediate family members of qualifying individuals are also welcome to join.

Navy Federal Credit Union

• Starting APR: 4.54%
• Loan amounts: Unspecified
• Loan terms: 36 to 96 months

Navy Federal offers competitive loan rates for those who meet its membership requirements. To join, you must have a connection to the U.S. military. If you’re eligible, you can become a member by opening a Navy Federal savings account with a deposit of as little as $5.

Members can apply for a loan to purchase a new or used car or refinance an existing loan from another lender. You can get preapproved for a loan and then receive a check to take to the dealer. Discounts are available for active duty and retired military members who enroll in direct deposit. Additional discounts are available on car insurance, and guaranteed asset protection (GAP) can be added to any new or existing loan.

Pentagon Federal Credit Union

• Starting APR: 4.59% (with car-buying discount)
• Loan amounts: $500 to $150,000
• Loan terms: 36 to 84 months

At PenFed, you’ll find some of the best new car loan rates available on all types of auto loans: new, used and refinancing. You don’t have to be a member to apply for a loan, but you will have to join to receive the loan funds. You can apply for both membership and a loan online.

As the name implies, PenFed was originally created to serve Department of Defense employees, but it has recently opened its membership to anyone. All you need is a valid Social Security number or taxpayer identification number (TIN). You’ll need to make a $5 minimum deposit, as all members must own a “share” in the credit union to use its services.

Lake Michigan Credit Union (LMCU)

• Starting APR: 6.49%
• Loan amounts: Unspecified
• Loan terms: Unspecified

Despite having a state in its name, Lake Michigan Credit Union has an open, nationwide membership. Anyone who makes a $5 donation to the ALS (Amyotrophic Lateral Sclerosis) Foundation can join LMCU. This credit union offers financing on all sorts of vehicles, including new and used cars, trucks, vans, motorcycles, watercraft, ATVs and RVs. If you don’t already have a car picked out, LMCU can connect you to a car-buying service to help you find what you’re looking for and get a good deal on it.

Founded by a teacher during the Great Depression, LMCU has more than $11 billion in assets and over half a million members today.

Boeing Employee Credit Union (BECU)

• Starting APR: 4.99%
• Loan amounts: Up to $250,000
• Loan terms: Up to 84 months

Founded in the same economy, BECU was started in 1935 by 18 people with just $9 in total. Its first loan was a mere $2.50. Today, it has over 1.3 million members and $30.2 billion in assets.

This credit union offers financing and refinancing on new and used vehicles bought from dealers or private sellers, including cars, boats, RVs and motorcycles. Buyers looking for financial advice and support can read BECU articles on car buying before making a commitment.

Membership eligibility can be based on a donation, employment, family ties or location. To join, you can make a one-time donation of $10 minimum to KEXP, a Seattle-based radio station. Otherwise, employees, retirees and volunteers of any credit union and of Boeing, including its subsidiaries and affiliates, plus their family members, are eligible to join. Those who live or work in Washington state and some parts of Oregon and Idaho can also qualify.

Randolph-Brooks Federal Credit Union (RBFCU)

• Starting APR: 5.94%
• Loan amounts: Unspecified
• Loan terms: 24 to 84 months

This Texas-based credit union offers new, used and refinance auto loans, as well as financing for lease buyouts and specialty vehicles including RVs, motorcycles, boats, personal watercraft and ATVs. Rates will vary based on loan terms, as well as your credit rating, collateral value, amount financed and other factors. You may apply without being a member, but you must have an active membership to finalize your loan.

RBFCU serves four major market areas in Texas — Austin, Corpus Christi, Dallas-Fort Worth and San Antonio — with more than 60 branches. Qualifying organizations include employers, places of worship, community organizations, neighborhoods and schools, but you can also join if someone in your immediate family is an RBFCU member. You must open a primary savings account with a minimum deposit of $1 to become a member.

Golden 1 Credit Union

• Starting APR: 5.09%
• Loan amounts: Unspecified
• Loan terms: Unspecified

California residents can find competitive auto financing at Golden 1 Credit Union, which has more than 1 million members and $17 billion in assets. It offers financing and refinancing on both new and used vehicles, as well as loans for new and used boats, jet skis, RVs and ATVs.

Preapprovals are good for up to 30 days while you’re shopping for a car, so you can compare rates and select the best deal for you. If you can’t make a payment, Golden 1 members can “skip” up to two payments over the life of the loan, which is to say you can defer and make up the payments later.

Golden 1 Credit Union offers membership to everyone who lives or works in California, in addition to the family members and domestic partners of current members. Those outside of California are allowed to join if they belong to select employee groups. To become a member, you only have to open a Golden 1 savings account with a $1 deposit.

Bonus: Southeast Financial Credit Union

This financial institution isn’t one of the largest in the nation — it has only $400 million in assets — but it does have the lowest starting rate for auto loans that we’ve seen. Note that the rates depend on the loan term.

To join, you only need to make a one-time $5 donation to Autism Tennessee. This credit union can also help you out with other types of financing, including loans for specialty vehicles: motorcycles, ATVs, boats, jet skis, RVs, lawn mowers and snowmobiles.