Just a certain type.
You can look through AFg’s website in the press release section. They usually announce all the small CUs they sign each quarter. Those would be your best bet to see if there is one you can work with. PenFed was their only national CU and the rest are all small that serve a group of counties in various states.
PenFed dropping the balloons is very interesting. That means they are most likely not seeing the originations that afg sold them on. They had been very interested in leasing for years and then made a last minute decision to go with balloons based on a middle man who I think had a piece of the deal.
I’d guess they will turn on a lease program sometime in the next year or two. Stay tuned!
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Damn I just picked my 2021 trd pro 4runner with this Penfed program back in June. Taxes on full vehicle price were paid on vehicle upfront. Had no issues with penfed.
Any chances this program comes back? Would love to pick up other vehicles with this program.
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If they truly killed it an didn’t just pause it, there is almost no chance it comes back.
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Latest BALLON LOAN options (best to worst):
CapEd Credit Union (https://capedcu.com/)
They offer a payment saver loan option (via AFG) at a 3.84% rate. Membership to the CU is possible via a $20 donation to CapEd Foundation. Also offers a 2.14% rate for 96 months, so one application gives you both options. Uses transunion credit for initial score
Hanscom Federal Credit Union (https://hfcu.org/)
Better then a lease loan offering is backed by AFG at a 3.74% rate. Membership to the CU is possible via a $35 donation to Nashua River Watershed Association. Uses transunion credit for score.
AmeriCU Credit Union (https://americu.org/)
Membership via $15 one-time donation to American Consumer Council. Uses experian for credit score. Payment came back very high, not sure what rates/fees they used.
Teachers Federal Credit Union (https://teachersfcu.org/)
Open membership, anyone can join. Paysaver rates not posted, but you can apply for paysaver loan via the website. Uses transunion credit for score. Came back with a rate over 5%
Regional options (not-open-membership) to consider:
SEFCU (NY),
MountainCrest FCU (WA),
Vermont FCU (VT),
Frankenmuth CU (MI)
Lowest available BALLON LOAN rate found was 2.49% but I did not qualify. Note that fees charged between providers can vary. At minimum, expect a $725 origination fee for vehicles over $75K. In one case, I was quoted $1500 for origination. Expect a hard pull immediately after submitting your application online.
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I was curious to understand this program since it is outside my experience, found this thread from March 2020! If only they had done it then, probably the last year and half is the only time the RV is cheap compared to the price of the car on many a car coming off lease assuming you stuck to the allotted miles and there is no accident or damage or abuse
I found 2 more that you can join with membership, I should put together a list probably and link it here. Tons of credit unions that offer these products nationwide.
https://www.edgefcu.org/why-edge.html?showtab=3
I will compile a list state by state that has this product if people are interested. Some of them you can donate and become an honorary member to get access to the membership. I’ll keep you guys posted.
Florida + all other states if you donate $5
https://www.gcfcu.org/Join-Us
Cheers!
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Are there ones that actually have the 2.99 rate? Mountain crest had a 4.49 rate that pretty much makes it non competitive vs a lease.
It is highly unlikely you’ll see a balloon program with rates less than 4%. If you looked hard you may find one down in the 3.5% range. The way it typically works is AFG takes the CU’s retail rates and marks them up 1% which is how they make money since there is no acq fee.
So balloon programs through AFG will typically have a low RV and high rates plus full sales tax. This means you are paying a much higher payment compared to a lease. You’ll pay down a lot of depreciation so you will definitely want to look at the equity opportunity towards the end of the term and most likely refi the balloon payment. Very few of them are upside down because they are using a RV at 90% of ALG which is already super conservative.
Several captives, banks and CUs used to offer balloons but the only ones that still do are the CUs that are using AFG’s program. The ones that stoped balloons focused on leasing because that has a much higher demand level and awareness with consumers and dealers.
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Affinity has good rates.
| Loan Types | Term | APR as low as5 |
|---|---|---|
| New Auto | Up to 36 Months | 1.39% |
| Up to 48 Months | 1.54% | |
| Up to 60 Months | 1.76% | |
| Up to 72 Months | 2.11% | |
| Up to 84 Months | 2.36% | |
| Up to 96 Months | 4.37% | |
| Used Auto | Up to 36 Months | 1.77% |
| Up to 48 Months | 1.92% | |
| Up to 60 Months | 2.01% | |
| Up to 72 Months | 2.25% | |
| Up to 84 Months | 3.01% | |
| Older Model Used Auto | Up to 36 Months | 6.49% |
| 37-60 Months | 7.11% |
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Remember that a lease has extra financing costs that do not apply to financing. Acq fee is the big one. Also disp unless one plans to remain “loyal” to a single corporation for their whole life.
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Penfed was at 2.74% 5 years ago and now the car I financed in June was 3.99% …
I don’t keep my cars long enough to care what the rate is … 2-3 years and most leases are in the area of 4-6% on cars I buy … plus the $1k acquisition fee makes it silly. Sure, I pay full sales tax but then I don’t have to deal with the BS of turn in etc … well worth the difference.
I’m on my 9th year and about 4th car doing this with penfed. Bummer they don’t offer it, but I found a local CU that will do the same. I’m glad the product exists, why tie up so much when you can invest and spend it on other things ;).
Cheers.
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I used Penfed payment saver to buy all of my cars. Gearing up for my next purchase, I’ve started looking other CU that offer AFG’s payment saver program - GPO seems to have the best rates, but no easy way to join. Not sure if somebody can find a backdoor in. Become a Member | GPO Federal Credit Union - GPO Federal Credit Union
It’s not technically a balloon financing program, but the First Republic PLOC I recently went for can be treated as one.
For example, you can borrow $40K for a car and make monthly interest payments (and any principal you want to pay down, say $500 per month) during the two-year “draw” period, and then pay off the remaining principal in one lump sum once 24 months have elapsed (e.g., $28,00).
The 2.25% rate is pretty competitive and there’s no lienholder to deal with. Downside is that the draw period is only two years.
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So it’s the automotive equivalent of a HELOC?
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This is interesting for say a Tacoma; while dated it often doesn’t depreciate much. 2 years from now it would be worth very close to MSRP?
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Sorta, except there’s no collateral and you have a revolving sum of funds to draw from at any time during the first two years.
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do you know if there’s a penalty for pre-paying on the auto advantage program?
I have never been charged a penalty for paying off a paysaver loan early with PenFed.
Here are the most promising CU’s w/ a paysaver program:
Teachers Federal Credit Union (open membership)
AmeriCU Credit Union. (membership w/ donation)
I was not able to get into SEFCU or MountainCrest FCU.
I am also working with Vermont FCU, but they are not open membership.