Category Archives: Car Buying

Credit Unions’ History Shows Resilience of Cooperative Banking Model

CUNA_ICU_Logo_Final_WCIn honor of International Credit Union Day, NerdWallet Looks Back at the History of Credit Unions in the U.S.

Credit unions surpassed the 100 million-member mark in June, reaffirming the strength of the federally insured system throughout the years—from the Great Depression to the Great Recession and its aftermath.

Credit unions are gaining popularity among consumers who want financial benefits, fewer fees, lower loan rates and higher interest on savings accounts. In the past year alone, credit unions added 2.85 million members. This growth was the largest reported 12-month increase in more than 25 years, according to Credit Union National Association (CUNA). From the start, these not-for-profit financial co-operatives have greatly benefitted their members.

Rise of credit unions

The first U.S. credit union opened in 1909 in Manchester, New Hampshire, according to the National Credit Union Administration (NCUA), which regulates, charters and supervises federal credit unions. However, it was not until the Great Depression that these financial institutions were organized under federal law.

President Franklin D. Roosevelt signed the 1934 Federal Credit Union Act at a time when Americans had very little faith in banking institutions. The law was intended to make credit available to people at all economic levels and to promote thrift. By the end of 1940, there were 3,756 federal credit unions in the U.S.

 

Mid- to late-20th-century changes

By 1970, Congress had created the NCUA as well as the National Credit Union Share Insurance Fund to back share accounts in all federal credit unions, as well as most that hold only state charters. At first, credit union membership was open only to a well-defined community, such as residents of a specific town or county, or the employees of a particular company.

In the 1980s, membership criteria were loosened, allowing more flexibility in who could join. By then, the services credit unions could offer had been expanded to include share certificates and home mortgages. In 1985, credit unions insured by the fund received the backing of the “full faith and credit” of the U.S. government.

Banks, which compete with credit unions, challenged looser membership rules, and in 1996 and 1997, the federal courts backed those challenges. But in 1998, President Bill Clinton signed the Credit Union Membership Access Act to restore membership flexibility.

The Great Recession

During the financial crisis that spawned the most recent recession, Congress took a number of steps to help banks and credit unions handle fiscal stress. One, a temporary increase in share insurance protection to $250,000 from $100,000, matching the Federal Deposit Insurance Corp.’s backing of bank deposits, was made permanent in 2010.

Today, about a third of all Americans belong to credit unions, which hold $1.1 trillion in assets, according to NCUA figures.

How do credit unions offer better deals?

Unlike for-profit banks, credit unions are member-owned organizations operated democratically and overseen by volunteer directors. They are exempt from federal and most state taxes, a status that has drawn challenges from bank groups, who say it provides an unfair competitive advantage. Credit unions say their status is appropriate because they exist to serve members, not make a profit.

“Credit union products and services saved consumers $8.5 billion in 2013,” said Pat Keefe, CUNA’s top spokesman, in an August 2014 statement. “That benefit goes both directly to credit union members, because members—not stockholders—are owners, and to the American consumer overall because credit unions’ better pricing puts competitive heat on banks.”

Credit unions return earnings to members in the form of lower loan rates and high interest on deposits. For example, the national average credit union rate for a 36-month used car loan was about 2.7% in the second quarter compared with the almost 5.3% average bank rate. Meanwhile, a five-year share certificate with a $10,000 minimum carried an annual yield of more than 1.3% compared with the less than 1.2% average bank yield.

Depending on the individual credit union, other financial benefits may include truly free checking accounts for students, seniors and businesses; a larger network of surcharge-free automated teller machines; mobile banking apps; and interest on savings that beats that of most banks. Because credit unions are managed for the benefit of their members, they’re often able to provide more personalized service than banks can.

Credit unions have a long history of providing Americans with a stable source of loans and a secure place for savings. These institutions have proven their ability to weather even the bleakest economic climates, so there are plenty of good reasons to join one. After all, can 100 million people be wrong?

Anna Helhoski, NerdWallet

Earth Day

GreenCar_LargeToday is Earth Day! Do you want to help? BrightStar can help you Go Green & Save Green! BrightStar’s Green Auto Loan program provides rate discounts of .50% APR for qualifying vehicles. Check it out https://www.bscu.org/gogreen/index.htm

BrightStar CU has two reasons why people in South Florida may want to join. First, we offer a $100 to new members who open our free checking account. Second, BrightStar has some competitive CD & IRA CD rates. Read more http://bit.ly/UKAKfK

Now Is The Time For A BrightStar Auto Loan!

Spring into action with BrightStar’s Auto Loan Sale, Now until April 16th. Get preapproved & close on your loan during the sale period & get $50 cash back. New & Used car loan rates as low as 2.99% APR. Apply online at BSCU.org or call 954-486-2728. Conditions apply. Click photo for more details.

 

 

Members-Only 3 Day Car Sale

Auto Loans as low as2.99% APR (for 36 months). BrightStar has teamed up with People’s Credit Union to bring you this exclusive members-only
event.  Not a member? Join Today

  • Thursday, October 20th – 9am – 4pm
  •  Friday, October 21st – 9am – 6pm
  •  Saturday, October 22nd – 9am – 4pm

Get Pre-Approved for your BrightStar Auto Loan before the sale.

  • Large Selection of New & Pre-Owned Vehicles
  •  Trade–ins Welcome
  •  Plus get a $25 discount on a BrightStar Vehicle Extended Warranty!
  •  Register at the sale to win a 50” LG Plasma TV
  •  Free Hotdogs (while they last)

 

Don’t miss it!  Details on our web site: bscu.org/autocenter/carsale_membersonly

Buying Versus Leasing a Car

 

There are big differences between buying and leasing. Typically, if you were to purchase a new car, you would make a down payment and finance the remaining cost. At the end of the term, the car would be yours. Leasing is essentially renting, with your payment going towards the car’s depreciation. If the lease includes a purchase option, you may buy it at the end of a specific time period.

So which is better? That depends on your individual situation and needs. You will have to decide for yourself by analyzing the advantages and disadvantages of each:

Leasing Advantages
There are short-term cost advantages to leasing. The monthly payments on a leased car are usually far less than on a loan – even for a luxury model. The down payment usually works out to be less than what you would pay for a bought car as well. Because the typical lease is for three years, most repairs are covered by factory warranty. Sales tax is cheaper too, as you only pay it on the financed portion.

An attractive feature of leasing is the ability to drive a new car every few years. You never have to go through the hassle of selling it; you just turn it in at the end of the term.

Leasing Disadvantages
While the payments are often reasonable, you never gain equity in the car. If you were to buy it at the end of your contract, it would cost you a lot more than if you had just bought it in the first place.

Leases are restrictive. If you exceed the yearly mileage limit you will be assessed an extra charge. You must take good care of the car as well, as any nicks or dings will be considered “wear and tear” and will cost you.

Comparing lease offers can be very confusing, making it hard to know if you got a good deal. And you will find it difficult to get out of your lease early if you want to – a problem if your driving needs or financial circumstances change.

Buying Advantages
When you buy a car, it’s yours. You can customize it and drive it as hard and far as you want, penalty-free. Rather than having infinite payments, buying means you will eventually pay the car off. And if you want to sell it you can do so at any time, as you are not locked into a contract.

Buying Disadvantages
Down payments on bought cars can be substantial. Monthly payments are usually higher than a leased car, and once your warranty expires, you will be responsible for the maintenance costs. When you want to sell it (or trade it in) you will have to go through the hassle of doing so. And, as an investment, new cars depreciate rather than appreciate.

DUE TO POPULAR DEMAND… Our Car Loan Sale has been EXTENDED!

We did it AGAIN! You keep asking, and we keep listening! Our amazingly low auto loan rate special was scheduled to end on October 31st. But due to member interest, we are extending it until November 15th! So if you haven’t been able to take advantage, now is the right time for a BrightStar Auto Loan. We offer New & Used vehicle loan rates as low as 2.99% APR. Get pre-approved & close on your loan TODAY.

Visit http://www.bscu.org/autocenter/carsale_october2010.htm for complete details.

Need help finding a vehicle?

Give our wonderful Auto Advisor Roland a call at (954) 497-4186. He can take care of the details in locating your car plus negotiating a great price for you – all without you having to ever step into a dealership. If you have already found the car of your choice, get preapproved then use your preapproved loan to buy a new or used car at any South Florida car dealership during the sale period. But HURRY the sale ends in 14 DAYS!

Two Week Auto Loan Sale: October 15th – 30th (2010)!

The One Day Car Sale for October 30th has been cancelled. However, due to popular demand we are having a Two Week Auto Loan Sale: October 15th – 30th. With rates as low as 2.99%APR on new and used vehicles and refinancing from elsewhere. Get Pre Approved Today! Use it to buy a new or used car at any South Florida Car Dealership during the sale period. Give our Auto Advisor, Roland, a call at 954-497-4186. He can take care of the details in getting the vehicle that you need with no hassle and no haggle pricing! Apply by phone at 954-486-2728, or by visiting your nearest BrightStar location. Conditions apply. Visit our home page  for more information.