North Alabama Educators Credit Union

5 NAECU.ORG NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE Learn the Lingo Before you go kick some tires, broaden your financial vocabulary so you can decipher the offers you may get once you're on the car lot. → ANNUAL PERCENTAGE RATE ˆAPR‰: A rate covering the annual cost of paying off a loan. APR includes cost of the loan and any other fees or costs associated with the purchase. → BLUE BOOK VALUE: The amount a car may be worth based on values supplied by Kelley Blue Book Inc. → DOWN PAYMENT: A lump sum paid upfront when purchasing a car. This initial payment typically helps lower costs of the overall loan. → EQUITY: An amount of money the vehicle is worth versus what is owed. If your car is worth more than what you owe, you have positive equity. If your vehicle is worth less than what you owe, you have negative equity. → REBATE: Also referred to as "cash back," a rebate is a special discount automobile manufacturers may offer to buyers to reduce the overall purchase price of a new car. Manufacturers may offer special rebates to people, such as students, military, or returning customers. → TERM LENGTH: This refers to the overall timeframe of your auto loan. A shorter-term length means making larger monthly payments but paying the car off earlier. Longer-term lengths can equal lower monthly payments. → TRADE"IN: Most dealerships will buy your old automobile, applying the price paid to pay off an existing loan or to pay toward the down payment of a new car on their lot. If you're considering this option, check the Blue Book value of your vehicle first, as you may be able to sell your car to an individual for more money than the dealership can offer. CRUNCHING THE NUMBERS Consider this example. An NAECU member wants to buy a new car, and the auto dealership is offering the car for $25,000 with buyer's choice of 0% APR or a $2,000 rebate to bring the cost down to $23,000. The NAECU member also qualifies for NAECU's current lowest auto loan rate of 2.49% APR (available through November 2014). The member can go with: → Option 1—Purchasing the car for $25,000 with 0% APR with the dealership over a 60-month period for equal monthly payments of $416.66, paying a grand total of $25,000 for the vehicle. → Option 2—Purchasing the car for $23,000 (a er the manufacturer's rebate) with NAECU's 2.49% APR over a 60-month period for equal monthly payments of $408.89, paying a grand total of $24,585.27 for the vehicle. This member would save an average of $102.84 per year on their loan and $514.73 overall, and the automobile loan would be in a much better equity position due to the lower amount financed. Additionally, qualifying members could extend the loan up to 66 months, if preferred. Also, with NAECU, the first payment could be deferred up to 90 days. USED CAR FINANCING, TOO A gently used car or certified pre-owned vehicle can sometimes be a better fit for your budget or your family's transportation needs. NAECU is excited to offer fixed-rate car loans with 2.49% APR for both used and new vehicles. Refinancing from another financial institution is also available at this reduced rate. ALREADY FINANCED WITH NAECU? Members who have an existing auto loan with NAECU can take advantage of loan modification to get a lower monthly payment, too. "Loan modification is a great option for members who want to keep a good vehicle and funnel extra money into their budgets," Mr. Olmsted says. "The best candidates for this financing option are members who have had their loans for two or three years and have a loan payment based on a much larger initial loan amount." NOT SURE WHICH AUTO LOAN OPTION IS BEST FOR YOU? CONTACT AN NAECU LOAN OFFICER FOR A FINANCIAL COMPARISON. YOU CAN ALSO LEARN MORE ABOUT OUR LOANS AND APPLY FOR A LOAN ONLINE AT NAECU.ORG. * Qualifications must be met on all loans. Rates and loan availability are subject to change without notice. Your credit worthiness as well as other factors such as length of the loan and the value of your collateral will determine your actual loan interest rate. Equal credit opportunity lender.

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