PenFed Auto Loan Review: Pros, Cons, & What We Like

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PenFed is a credit union that was mainly available for active and retired military personnel. However, PenFed is now open to anyone that opens a savings account with at least $5.

Having a PenFed account brings you several benefits across checking/savings accounts, credit cards, mortgages, personal loans,auto loan refinance, and new auto loans.

This article will discuss the auto loan aspect of PenFed and the benefits PenFed members receive as well as how to maximize discounts on APR and purchase price.

Best for Auto Loans
PenFed Auto Loan Rates
PenFed Auto Loans
  • Loan Amount
    $500 - $100,000
  • Est. APR
    1.79% - 17.99%
  • Learn More
  • Auto Loan Details

How Do PenFed Auto Loans Work?

You will need to become a member of the PenFed credit union to be eligible for auto loans. Once a PenFed member, you will have access to loans for new auto purchases, used auto purchases, and refinancing auto loans. Right now, PenFed offers some of the best auto loan rates around.

PenFed Auto Loan Options

Here are the different loan options and their terms when using PenFed’s “car buying service” through their partner TrueCar versus not using TrueCar.

Purchases outside of TrueCar will have higher APRs and shorter terms of up to 60 months compared to 72 months when purchasing through TrueCar.

#1. New Auto Loan

Here are the non-discounted rates for a used auto loan not using TrueCar.

  • Terms: PenFed offers new auto financing with 36 months or 60 months terms.
  • APRs: APRs for new auto financing are 1.79% for 36 months and 1.99% for 60 months terms.
  • Loan Amounts: The loan amounts for used auto financing are a minimum of $500 for 36 months and a minimum of $10,000 for 60 months with a maximum of $100,000 no matter the term.

Here are the non-discounted rates for a used auto loan not using TrueCar.

#2. Used Auto Loan

  • Terms: PenFed offers used auto financing with 36 months or 60 months terms.
  • APRs: APRs for used auto financing are 2.39% for 36 months and 2.59% for 60 months terms.
  • Loan Amounts: The loan amounts of used auto financing are a minimum of $500 for 36 months and a minimum of $10,000 for 60 months with a maximum of $100,000 no matter the term.

The refinancing rates are split between new vehicles and pre-owned (used) vehicles.

#3. Refinance Car Loans

  • Terms: You can refinance your auto loan via PenFed for 36 months.
  • APRs: Your discounted APR is at 1.79% for models 2020 or newer and 2.39% for pre-owned vehicles or vehicles with over 7,501 miles (as of May 15th, 2021).
  • Loan Amounts: Loan amounts on PenFed refinancing is $500 minimum and up to $100,000.

Here is the difference when using PenFeds “Car Buying Service,” which uses vehicle searching and purchasing through their partner TrueCar.

#4. Car Buying Service

When you buy through their partner, TrueCar, you receive longer terms, more term options, and lower APRs.

  • Terms: PenFed offers new auto financing with 36 months to 72 months.
  • APRs: APRs for new auto financing are extremely low, 0.99% for 36 – 60 months terms and 1.99% for 72-month terms, as of May 15th, 2021.
  • Loan Amounts: The minimum loan amount of a new auto loan is $500 for 36 months, $7,500 for 48 months, $10,000 for 60 months, and $15,000 for 72 months, with the maximum being $100,000 for all term lengths.

PenFed also offers appealing auto loan benefits to its members.

Additional PenFed Auto Services Offered

GAP Protection

You may have heard of horror stories where you get in a car accident, and your loan is now more than your vehicle is worth, this is where PenFed’s GAP Protection comes into place. With PenFed’s GAP Protection, PenFed will cover the difference between the value of your vehicle and the loan.

Extended Warranty

PenFed offers an Extended Warranty by picking up where the auto manufactures warranty ends and offers three additional options (6 years, 5 years, and 3 years) to choose from to extend your vehicle warranty.

Debt Protection

With PenFed Debt Protection, your family’s financial security is protected in the event you are unable to make a timely payment due to financial hardship by offering three different plans.

  • Plan 1 covers loss of life, disability, and involuntary unemployment. The cost is $2.10 for $1,000 loan balance.
  • Plan 2 covers loss of life and disability. The cost is $1.20 per $1,000 loan balance
  • Plan 3 covers only the loss of life. The cost is $0.88 per $1,000 loan balance.

Who Is Qualified for a PenFed Auto Loan? Membership Requirements

You must be a PenFed member for at least 60 days to qualify for a PenFed Auto Loan and exclusive dealer allowances.

PenFed Auto Loan Preapproval Process Explained

Similar to getting a preapproval letter for a mortgage, it is a good idea to get a preapproval letter for a car loan as well.

Once you are a member of PenFed for at least 90 days, you are eligible to receive a preapproval letter. Keep in mind this does not guarantee approval, and terms may change if/when you are approved.

How to Apply for a PenFed Auto Loan

PenFed breaks down applying for an auto loan into four steps.

  1. Search for a new or used card.
  2. Lock in your savings as a member by searching certified dealers
  3. Apply online
  4. Visit the dealer and drive away with your new or used car!

PenFed Auto Loan Pros and Cons


  • PenFed offers APRs as low as 0.99% for PenFed members when using discounts available.
  • You can get PenFed auto loans on new and used cars.
  • PenFed auto loans can be used for refinancing.
  • PenFed offers GAP protection, which is the difference between the value of your car and your loan payoff amount. This is a great security net in case of an accident.
  • You can purchase an extended warranty through PenFed as they offer three different extended warranty plans.
  • If you find yourself in financial hardship, PenFed’s Debt Protection benefit is a service you can purchase for a fraction of your loan. PenFed will then cover your payments for qualified hardships.
  • PenFed offers loan terms from 36 months ($500 loan minimum) to 72 months ($15,000 loan minimum) when using their “Car Buying Service” or up to 60 months when not utilizing PenFed’s “Car Buying Service.”
  • You can also receive further discounted vehicle pricing and auto loan rates when you purchase through their partner TrueCar.


  • PenFed does have a hefty late payment fee where you can incur a 20% fee for being late. There is a max fee of $25 for a late payment.
  • You need to be a PenFed member for at least 60 days to be eligible for exclusive manufacture discounts.
  • You need to be a PenFed member for 90 days before you can get a preapproval letter.
  • Discounted APRs and purchase prices are only if you purchase through their partner, TrueCar.

How Does PenFed Auto Loans Compare?

PenFed is great if you already have a membership with the credit union. If you do not, then here is who we like more.

#1. Caribou vs. PenFed Auto Loans

Caribou is redefining the way consumers apply for auto loan refinance. On their platform, you can compare real-time rates from multiple lenders.

This free service does not impact your credit score, and they will even help you with transferring your vehicle title if you choose a loan from one of their partners. Moreover, Caribou also assigns a customer representative to your application to help you throughout the process. This is great if you have any last minute questions or second guesses.

>> More: Caribou Review

#2. Auto Approve vs. PenFed Auto Loans

Auto Approve is another auto loan comparison marketplace. In minutes, you can compare real-time auto loan quotes from various lenders. Auto Approve advertises loans as low as 1.90%*, terms between 12 – 84 months, and loan ranges between $7,500 – $150,000.

>> More: Auto Approve Review

#3. PenFed Auto Loans vs. RateGenius

RateGenius allows you to compare multiple auto loan rates and explore various refinancing opportunities in minutes. With loans as low as 1.99%, RateGenius also accepts those with low credit score.

At no cost to you, RateGenius will streamline the auto loan process and will make owning your dream car a reality.

>> More:RateGenius Review

#4. Tresl Auto Loans vs. PenFed Auto Loans

Tresl uses proprietary technology to help you search & compare auto finance opportunities. In minutes, you can compare rates from different lenders.

Tresl advertises loans as low as 2.49%* and terms between 36 to 84 months.

>> More:Tresl Auto Loans Review

Frequently Asked Questions

Here are some frequently asked questions about PenFed Auto Loans.

Is PenFed Good for Auto Loans?

If you are a member of PenFed and you do not mind shopping for vehicles through TrueCar, you will be hard-pressed finding better terms on auto loans.

Not only will you get rates starting at 0.99% (as of May 15th, 2021), but you will also receive thousands of dollars off the MRSP.

What Credit Score Does PenFed use for Cars?

You will not find the minimum requirements listed on PenFed other than you do need to be 18 years or older.

However, many are reporting getting approvals with a credit score of at least 500 to qualify for an auto loan and around 800 to get the best rates PenFed offers.

What Is the Maximum PenFed Auto Loan Term Length?

The maximum auto loan term by PenFed is 72 months when buying via TrueCar and 60 months when buying outside of TrueCar.

Bottom Line: PenFed Auto Loan Review

PenFed offers its members great auto loan terms and rates. If you do not mind “shopping” for cars via their partner TrueCar, not only will you receive even better rates, but you can also get discounts up to $4,000 on the purchase of the vehicle you buy as well as longer payment terms of up to 72 months.

Opening an account with PenFed is simple as you only need $5 to open a savings account. With the many different services they offer, such as mortgages, checking/savings account, personal loans, credit cards, and auto loans, securing your PenFed account is a great idea. Furthermore, they are NCUA insured, which is equivalent to being FDIC insured but for Credit Unions.

Brian Latchford
Brian Latchford

Brian is a serial entrepreneur that loves financial technology and personal finance. From working with start-ups to creating his own recruiting company, Brian knows first hand what it takes to manage money. Throughout his career, Brian has become a respected writer covering topics in personal finance, business, and financial technology.