Auto LoansAuto Lender Reviews

MCU Auto Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

The Municipal Credit Union of New York (MCU) offers auto loan rates as low as 2.09% APR for those who use its car-buying service. Still, there are several drawbacks: MCU auto loans are only available for members living in New York, New Jersey, Connecticut or Pennsylvania and can only be applied toward vehicles from a franchise dealership or select independent dealers. Furthermore, issues of extreme mismanagement have impacted MCU in recent years — however, it is now under the management of the National Credit Union Administration. See more details on that below.

How do MCU auto loans work?

MCU offers loans for new and used vehicles, as well as loans to refinance a vehicle you already have. You can use an MCU loan at a franchise dealer or one of the following:

  • TrueCar Certified Dealers
  • Enterprise Car Sales
  • Carvana
  • CarMax
  • Hertz Car Sales

That means private sellers are off limits, and independent used car dealers may be a no-go, too. MCU is best for buyers interested in new cars, but its minimum 48-month loan may be longer than you’d like for the cheapest cars. Shoppers hunting for an inexpensive used vehicle may want to look elsewhere — a minimum 60-month auto loan may be longer than you need. Here’s a closer look at MCU’s lowest available rates.*

New Used Refinance
48 months 2.09% NA NA
60 months 3.09% 2.95% 3.55%
72 months 3.45% 3.75% 3.45%

*Includes APR discounts

MCU’s lowest auto loan rates include a .50% rate discount for using autopay and a .50% discount for purchasing a car through MCU’s Car Buying Service. Members can combine these two discounts for a total 1.00% off their APR. The rates are based on the condition of your credit, though MCU declined to state a required minimum credit score as well as other loan details. Older vehicles will be subject to higher starting APRs, while used vehicles with more than 100,000 miles are prohibited.

MCU Car Buying Service

As we’ve noted, the lowest rates are offered to borrowers who shop for their car through MCU. The credit union has partnered with online car-buying firm TrueCar, which connects shoppers with dealers in their area. Start by entering your preferred make, model and year online. TrueCar promises discounts off a new car’s MSRP and, sometimes, even used cars, too — still, it’s possible you could do as well or better negotiating on your own and from dealers of your choosing.

MCU membership requirements

MCU is a New York state-chartered credit union open to municipal employees of New York and employees and affiliates of a variety of organizations located in New York. Eligible individuals include, but aren’t limited to, the following groups:

  • Employees of medical facilities
  • Federal and state employees
  • Students enrolled in City University of New York and employees of certain colleges
  • Employees of the Archdiocese of New York or Brooklyn
  • Family members of current or eligible MCU members

In order to become a member, you’ll have to:

  • Answer questions about your eligibility.
  • Provide identification and proof of employment and address.
  • Open a Share Savings account with a minimum deposit of $5. There is a monthly service charge when your balance dips below $500, but it’s waived for loan holders.

How to apply for an auto loan at MCU

You’ll have to become a member of MCU in order to begin your application for an auto loan. Once you’ve become a member you can apply for a loan online, by phone or in-person at a branch.

MCU declined to clarify the exact steps to apply, but the credit union does offer loan pre-approval with a rate quote that’s good for 30 days.

If approved, a representative will contact you to request the required paperwork to finalize your approval. This could include proof of your income, state ID, proof of insurance or other documentation. Your documents can be submitted electronically via your online account, or by fax.

Is an auto loan through MCU worth it?

MCU offers a great starting APR, but you must use its car buying service and be a member in order to qualify for that low rate. Other credit unions allow you to apply for an auto loan before applying for membership, which allows you to see what rate you might receive before jumping through any membership hoops. Here are some of the other benefits and drawbacks of MCU auto loans:

Pros of MCU auto loans

  • Loan preapprovals: A preapproved auto loan allows you to shop for a vehicle knowing the rate and loan amount you’re qualified for before you go to the dealership. MCU’s preapproval includes a locked-in rate for 30 days, giving you time to compare quotes from other lenders.
  • No fees: There’s no application fee or prepayment penalty for refinance loans — however, it’s unclear if this applies to new and used auto loans as well.
  • High LTV. Borrowers can finance up to 125% of their vehicle purchase, but it’s best to be cautious when considering this. The danger is you could wind up upside down on your auto loan.

Cons of MCU auto loans

  • Lack of transparency: MCU does not publicly disclose certain details about its auto loans including credit requirements and minimum and maximum loan amounts available. It’s also unclear if the credit union finances motorcycles, RVs or boats.
  • Legal problems: In 2018, the credit union was placed under the conservatorship of the National Credit Union Administration (NCUA) as the result of former CEO Kam Wong’s conviction on embezzlement charges. Member deposits continue to be insured by the NCUA.
  • Fewer branches: In 2020, MCU plans to close six branches, leaving 16 remaining.

Who is an MCU auto loan best for?

MCU auto loans are only available to a select few — but if its specifications work for you, you could find a good deal here, especially if you like the idea of purchasing your next vehicle through its car buying service. An MCU auto loan is not for those looking to refinance an existing MCU loan — it only refinance loans from other lenders. You might be better off looking elsewhere if you prefer to do your banking in person and don’t live near one of its 16 branches.


Compare Auto Loan Offers