Dealer Finance vs. Pre-Approved FCU Car Loan: What's Actually the Difference?

Did you know? When you're buying a car, how you pay for it matters just as much as what you pay. 

Most Kiwis know they need to sort finance -  but many don't realise they have more than one option. You can arrange finance on the spot at the dealership, or you can come in already approved through a lender of your own choosing. These two paths can look similar on the surface, but they work quite differently once you understand what's happening behind the scenes.

Side by Side: The Key Differences

How Dealer Finance Works

When you finance through a dealership, the dealer arranges a loan on your behalf - often through a third-party lender they have a commercial relationship with. There are a few things worth understanding:

• The rate may not be the lender's standard rate. A dealer margin can be built into the interest rate. Often, when you finance a vehicle through a car dealer, you may be dealing with both the dealer and the finance company- each looking to make a margin. With First Credit Union, you only deal with our lenders and our simple loan product.
• It happens at the point of sale. Reviewing loan terms when you're already excited about a car isn't always the best time to be reading fine print.  getting a pre-approval from First Credit Union before you shop helps you set a realistic budget, understand your repayments and negotiate with confidence- on your terms.
• Early repayment fees may apply. Not all dealer finance products allow you to pay off early without a penalty - worth asking upfront. At First Credit Union there are no early repayment fees, so you can pay off your loan faster without being penalised.

How Pre-Approved Financing with First Credit Union Works

With an FCU pre-approved car loan, your finance is sorted before you step into a dealership.

• Rates from 10.95% p.a. variable, with no application fee
• No early repayment penalties - pay it off sooner if you can
• No hidden margins
• Terms up to 5 years with extra repayments allowed anytime

As a not-for-profit credit union, we answer to our members - not shareholders. Any surplus goes back to benefit you.

Ready to get pre-approved? Apply online or visit your nearest branch. Our team is available 7 days to help you finalise your purchase when the time comes.

*First Credit Union Incorporated is not a registered bank. Normal lending criteria and T&Cs apply. Subject to responsible lending enquiries. Third party fees of up to $29.90 per applicant may apply. Normal interest rates range from 10.95% p.a. to 18% p.a.