The Pentagon Federal Credit Union (www.penfed.org) is dropping their already low new car loan rate from 4.75% to 3.99% effective February 1st (heard on their hold music while waiting on hold when calling customer service). You get the rate in effect at the time the dealer deposits the loan so one can get pre-approved from today forward and get the 3.99% rate (it’s still 4.75% on the website as of right now). If you are uncomfortable applying until the rate shows as changed on the website, check back after 2/1. I was in the process of applying when I was notified by a CSR of the changed rate.
You have to apply online and this rate is for both new and used cars up to 60 months (new cars can finance longer at this rate). Their credit standards are not outrageous, but you should have a better than average FICO score to apply (I suspect anything above 700 is likely to get approved instantly).
Anyone can join. If you don’t qualify based on military service or membership in other organizations, you can choose to join the National Military Family Association (NMFA) for $20 for the year (you don’t need to renew). I opted that direction more than a month ago and never heard back from this organization, so I’m not even out the $20.
You are required to purchase one “share” at the credit union by putting a $5 deposit on account. Then, make sure to apply using the online application – if you phone in the application the rate is higher.
This is an exceptionally good deal unless your car manufacturer is running a special finance program at rates below this. Many will let you take extra cash off the deal if you opt not to use the manufacturer financing program, so consider getting pre-approved at Penfed (usually instant) and mention the 3.99% rate to the dealer when they ask about your financing. On rare occasions, a dealer might actually be able to beat it (be willing to let them try). At worst, you get 3.99%. You can pay the loan using their online payment system and have funds withdrawn from your existing accounts elsewhere, so you don’t have to switch banks.