Credit Unions and Banks That Finance Older Cars: No Problem, Low Cost

The best way to obtain financing for an older vehicle — such as a 15-year-old car or a used car with more than 100,000 miles on it — is through a credit union. Credit unions often have less stringent underwriting requirements than banks or dealership financing departments. To qualify, you must be a member of the credit union, and you should be prepared to pay a premium of several points above the current APR. You may also need to get the vehicle appraised. Below, we have more information about financing an older vehicle, including the credit unions and financial institutions that do it.

Financing an Older Vehicle

Most traditional banks won’t finance an automobile that’s more than 10 years old, and some banks require vehicles to be no older than seven years. “Buy here, pay here” dealerships and “We tote the note” car lots can help customers finance an older used car, but they often do so on prohibitively expensive terms. Also, specialty lenders offer loans for collectible cars, but few will extend credit for vehicles that don’t fit into the specialty market.

During our research, we found one source that is consistently willing to finance older vehicles without predatory or restrictive terms: credit unions. Adhering to less stringent financing guidelines and often restricting membership to certain geographical locations, specific employment sectors, or enrollment in the military allows credit unions to responsibly provide loans for vehicles older than 10 years. If you plan to take out such a loan, however, you should be prepared to make a significant down payment, accept a higher APR than a traditional auto loan, and, possibly, get an appraisal to determine the car’s worth.

Credit Unions and Banks That Finance Older Cars

Below, you’ll find the list of credit unions (and one bank) with a national presence and more open membership terms. There are, of course, several other local and specialized credit unions that may offer loans for older cars, but the terms for membership and loans at these credit unions will vary. We gathered the information below through a combination of researching the company’s websites and speaking to customer service representatives. We’ve ordered the list starting with the best overall options.

Pentagon Federal Credit Union

• Appraisal required? Yes
• Restrictions: PenFed finances all model years; borrowers cannot select a term longer than 60 months
• Membership requirements: Though PenFed originally only accepted military members, veterans, government employees, and employees of specific qualifying organizations, it currently extends membership privileges to anyone who opens a savings account and maintains a $5 balance.
• Find out more or apply

Connexus Credit Union

• Appraisal required? Yes
• Restrictions: Connexus will consider financing any older car, but it must go through the formal appraisal process to determine its value beforehand.
• Membership requirements: Connexus extends membership to residents of various Minnesota, Ohio, and Wisconsin municipalities, as well to employees of a number of associated companies. Additionally, anyone who joins the Members of the Connexus Association by giving a one-time $5 donation can become a Connexus member.
• Find out more or apply

Alliant Credit Union

• Appraisal required? Yes
• Restrictions: Underwriting will have to determine the vehicle’s residual value prior to making the loan
• Membership requirements: You must work or have worked with an Alliant partner company, have membership in a qualifying organization, have a family member that’s an Alliant member, or live or work in a community near Alliant’s Chicago headquarters. Additionally, you can become a member of the nonprofit Foster Care to Success, which requires a one-time payment of $5, and Alliant will pay the membership fee on your behalf.
• Find out more or apply

Randolph-Brooks Federal Credit Union

• Appraisal required? No
• Restrictions: RBFCU prefers to finance vehicles that are no older than nine years old; to finance an older vehicle, you need to have excellent credit. Since underwriting is based on the borrower’s credit rating, the rates on new and used vehicles are the same.
• Membership requirements: According to its website, RBFCU has “more than 3,000 ways to qualify you for membership.” Membership criteria can be based on where you live, work, worship, or go to school.
• Find out more or apply

USAA

• Appraisal required? No
• Restrictions: USAA’s underwriting department must examine and approve all loans for older vehicles on a case-by-case basis, and such loans may require a larger down payment.
• Membership requirements: USAA restricts membership to active-duty, guard, or reserve military members, veterans, cadets, midshipmen, and their eligible family members.
• Find out more or apply

NASA Federal Credit Union

• Appraisal required? No
• Restrictions: NASA Federal makes loan determinations on a case-by-case basis.
• Membership requirements: NASA Federal extends membership to NASA employees, retirees, or relatives or household members of a current member. Additionally, NASA Federal will provide a complimentary one-year affiliated membership to the National Space Society (NSS), which entitles you to full membership benefits.
• Find out more or apply