Home > Car Finance Resources | OUCU Financial

Car Finance Resources


We’re here to make the process of financing a car as easy as possible. Whether you’re looking for user-friendly auto loan calculators to make estimating payments easier, or simply want auto finance tips from lending experts, you’ve come to the right place.

Comprehensive Auto Finance Guide

Consider this car finance resource list your one-stop shop for all things related to auto financing so you can properly prepare and educate yourself every step of the way.

Auto Loan Interest Rates

The interest rate you qualify for can significantly impact the total amount you finance and your monthly payment.

Here’s an example showing a 5% vs. 15% interest rate:

Car price: $20,000
Downpayment: $1,500
Loan term: 60 months
Interest rate: 5%
Monthly payment: $297.94

Car price: $20,000
Downpayment: $1,500
Loan term: 60 months
Interest rate: 15%
Monthly payment: $391.18

Your credit score is a major factor in determining your interest rate. A higher score gives the credit union, bank, or financing company more confidence in your ability to repay your loan, so they charge you less to borrow the money. The opposite is true if you have a low credit score.

Rates will vary based on where you get your car loan. Credit unions tend to have the lowest rates, and you can expect to pay the most at buy-here-pay-here dealerships.

Average auto loan rates
OUCU auto loan rates


Car Affordability Calculator

One of the biggest car finance factors you must take into consideration is how much you can afford. While you won’t know all of the specifics until the credit union, bank, or financing company pulls your credit history, an online calculator provides a fairly accurate estimate.

If you have a vehicle to trade-in when you get your new car, that will also factor into your auto financing by reducing the total amount you owe.

It’s best to have an idea of the value of your car before trading it in. The National Automobile Dealer’s Association (NADA) is a trusted resource to research your car’s value.

Car affordability calculator
NADA Blue Book


Get A Copy Of Your Credit Report

Since your credit history will significantly impact the financing terms you qualify for, it’s best to review your credit report a few months before purchasing a new car. Doing this allows you to check your report for errors and take steps to improve your credit score if necessary.  

Request a free copy of your credit report


Determine Financing Options

Direct lending and dealer financing are the two most common types of auto finance options available to you for your vehicle purchase.

Direct Lending

One option is to borrow money from a bank, credit union, or financing company. In these situations, you have your loan approved before you go to the dealership.  So, all you need to do is pick out your car at the dealership and provide your financing information.

The benefit of taking this route is that you can shop around to get the best financing terms from a lender before you pick out your car.

Also, having financing in hand gives you more room to negotiate with the dealer regarding the vehicle you choose.

Dealership Financing

Another option is to purchase your car and get financing through the dealership.

Financing doesn’t typically remain with the dealership. Instead, they sell it to a bank, a finance company or credit union who then collects payments. You might find it inconvenient to make payments to an unknown bank.

If you pay off your car before the predetermined loan term, you could be charged a prepayment penalty, so be sure to inquire about if this penalty is part of your contract.

Also, dealerships often charge more for various coverage options including GAP insurance. GAP insurance covers the difference between the amount owed to the finance company and the amount your insurance company will cover if your vehicle is stolen or totaled.

The benefit to dealer financing is that you can handle all of your auto purchasing needs at one time. Also, they tend to work with many financial institutions in hopes of securing the best terms, but you still might not find the lowest rate you could qualify for through a dealership.

Dealerships sometimes offer special financing options with low rates or other incentives, but these generally require excellent credit to qualify.

Understanding Car Finance Terms

You will hear many different terms when you go through the auto financing process, and it can get a bit confusing if you don’t understand what they mean. Here are a few of the most frequently used auto finance terms.  

Annual Percentage Rate (APR)

The APR is a finance charge applied to your auto loan that expresses your interest rate for the year.

Your APR can vary drastically from 2% for those with excellent credit to 15% for those with a lower score. The average APR is currently 4.21% for those with a credit score of 706.  

You can refer to the example in the Auto Loan Interest Rate section to see how your APR impacts your monthly auto loan payment.

Credit Score

This is the number based on your credit report that indicates whether you should qualify for a loan and the likelihood that you will pay back your loan on time and in full. The lower your credit score, the less confidence institutions have that you will follow through with your payments.

Down Payment

This is the amount you pay upfront when you purchase your vehicle. It reduces the total amount owed and gives confidence to the financing company as to your likelihood of repayment.

Extended Warranty

An extended warranty provides additional coverage beyond the basic warranty included with the car to cover specific auto defects over a certain period or number of miles.

Finance Charge

This is the total amount of interest paid over the life of the loan that is determined by the APR.

Gap Insurance

This covers the difference between what is owed on your vehicle and what the insurance company will pay in the event your car is stolen or totaled.

Market Value

The price a buyer would likely pay based on specifics about the vehicle.

Manufacturer’s Suggested Retail Price (MSRP)

The retail price of the vehicle. This is also known as the sticker price.


These are upgrades in a vehicle beyond the standard features such as heated seats, backup camera, navigation system, etc.


The number of months you agree to make auto loan payments. 60 months is the typical loan term, but it can range from 24 to 84 months.

Trade-In Value

The value of a car when you trade it in. You can estimate your trade-in value using online tools from sites such as NADA.com.


A contract made by the car dealership that the car will operate appropriately based on certain guidelines. If the vehicle fails to meet the guides specified in the agreement, the buyer is compensated.

Auto Finance Support & Resources

Navigating car finance information in hopes of making a well-informed decision on a big purchase can be overwhelming.

At OUCU, we’re here to help steer you down the right path, from auto financing to extra support and features after you purchase your new, or new-to-you, vehicle.

Learn more

« Return to "Blog" Go to main navigation