Despite the name, CUDL isn’t just cute. It’s powerful too- if you know how to use it. CUDL, less snuggle-inducingly known as Credit Union Direct Lending, helps people like you and me when we’re at car dealerships and are about to lose an extra $5000 we worked so hard to earn. So you’re probably thinking, “how does a tool that reminds me of Winnie the Pooh mean a Mustang?” Let’s dive in, shall we?
What is CUDL?
CUDL is a service through which individuals are able to get loans at auto dealerships which are financed through a credit union (with their rates) instead of the dealership and its rates. Basically, when you go into a dealership – unless you’re pre-approved (which you can also do through CUDL) – you probably don’t have anything set up for the loan you need to finance buying a car. Now, you’re the person dealerships love. If you finance through the dealership, odds are your loan will have a higher APR than what you would have gotten from a financial institution. Or, maybe they’ll give you a lower rate, but for a shorter amount of time, and suddenly you need to find a way to pay off your car within a year. If you ask the dealership if they are CUDL affiliated, however, you get to save a ton of money. They’ll give you the information and rates for the credit union that can finance your loan, and you can set up the loan right then and there, and have money left over to get some upgrades on your car too. That’s more CUDLy.
Why do I want to CUDL?
Remember in sixth grade, when your math teacher kept telling you algebra would be super helpful in life? Well, if you haven’t experienced that moment yet, the time has come. Let’s say you go into a dealership sans CUDL knowledge. Now, you found a car that fits your budget and it’s perfect and makes the vroom-vroom sound you love. You’re ready to drive out of the dealership, all you need to do is set up a loan to pay for the car. No biggie, right? Wrong. The loan the dealership gives you is a few percent higher than you expected. Now, that few percent is where the algebra comes in.
Let’s say you’ve found a $35,000 car you want (not including taxes, insurance, licensing fees, and any add ons). In World One, you get a loan with a dealership at 7% APR. That means that in the long run, you’ll be paying about $41,583.
Now, let’s say you’re getting the same $35,000 car but through CUDL. SafeAmerica Credit Union is famous for having some of the best rates, so this world is already looking up. Let’s say you qualify for 2.99% APR*. This means in the long run you’ll be paying $37,178.
Now, World Three. This is the world some dealerships love to trap you in. When you’re filling out your paperwork, some dealerships will offer you 0% APR. Sounds sweet right? But not for everyone. 0% APR is only offered to a very small amount of individuals who have the highest credit score and longest credit history. Usually with that kind of rate there’s a very short term, so even if it’s 0% you may need to pay off your car within two years. That breaks down to about $1,458 a month.
You see, dealerships take on a lot of risk when they give out loans so they want their money back as soon as possible, which can end up making simple things like monthly groceries unaffordable. In these three worlds, it’s pretty clear what the smart decision is. By working through CUDL, you can have about $4,405 in Savings in Interest. That’s roughly 12.58% of the original car price that you’re saving. Or 931 cartons of ice cream in savings. Or 3 flat screen TVs in savings. However you prefer to see it.
How do I CUDL?
The best part about CUDLing? It’s super easy. All you have to do is walk into a dealership, and ask if they’re CUDL affiliated. If they are, you can fill out the paperwork for your loan right there and then. And drive your car to the grocery store right after to buy a carton of ice cream.
Pro Tip: An even faster way to CUDL? If you’re already a member with SafeAmerica Credit Union, as soon as you walk through those CUDL-affiliated dealership doors you’re set to get the best rate possible.
Where can I CUDL?
CUDL is actually more accessible than you think. It has over 11,000 dealers across the nation, making it the largest point-of-sale and indirect auto lending network for credit unions in the country. To make it even easier for you to find a CUDL location, SafeAmerica’s set up a locator for you to use. Just plug in your zip code and what kind of car you’re dreaming of, and we’ll find the location for you.
Researched and drafted by Lavanya Bhalla