FAQ's - Southland auto loans

Car driving on Pacific Coast Highway

Buying a new vehicle can be overwhelming - we're here to help!

Whether you're in the market for a new or used vehicle, figuring out your financing and deciding on a car can be extremely overwhelming, and you may not know where to start. Southland is here to answer some common questions on our vehicle loans and get you started off on the right foot. 

If you have questions about a Southland vehicle loan that haven't been answered in this blog, call us at 800-426-1917 and we will be happy to help. 

Can I get pre-approved for a car loan?

Yes, you can get pre-approved! We recommend that you get pre-approved before you start shopping around so that you understand what your monthly payment and interest rate will be. It also helps make the process smoother once you have decided on what car you'd like to purchase - instead of haggling on financing with a dealership, you can finalize your car loan with Southland without coming into a branch. 

A pre-approval is good for 30 days, so you can shop without your rate changing. In some cases, your pre-approval may be extended if needed. 

How do I get approved for an auto loan?

There are several factors that go into a loan approval. This includes your credit score, credit history and credit usage among other factors. 

For more information on credit scores and how you can maintain a good score, read our blog or check out our credit resource library from Experian. If you're a Southland Member, you can check your FICO Score for free, and at no harm to your score, using Digital Banking

You can apply for a Southland auto loan here or by coming in to a Southland branch. You may need to provide proof of income, like paystubs, during the loan approval process.

Will a new vehicle loan affect my credit score?

Yes, any new loan will impact your credit score. A slight dip in your score after applying is common, since lenders will run a hard inquiry on your credit. However, part of keeping a good credit score is diversifying your credit mix and making payments on time, so if you keep on top of your payments, a new loan may end up having a positive impact on your credit score over time. 

Can I purchase a used vehicle?

Yes, you can use a Southland car loan to cover the purchase of a used vehicle. Used car loans rates are only 0.25% higher than new car loan rates. To qualify for a used car loan, the vehicle must be no older than seven years. For vehicles older than seven years, you may choose to finance it using a personal loan

Can I purchase a vehicle from a private owner instead of a dealership?

Yes, you can use a Southland loan to purchase a vehicle from a private party. However, when purchasing a vehicle from a private party, note that there are additional DMV steps in the purchase process that you will need to handle yourself. 

What is a car lease?

A car lease is a type of vehicle financing where you essentially rent a vehicle from a dealership for a set amount of time and miles. Typically, your monthly payment is smaller when leasing a car versus purchasing a car, but you will not be building equity in your vehicle. Your lease payments will still show up in your credit history, just as a loan payment would. At the end of your lease, you'll either return the vehicle to the dealer or buy out the lease if that's an option in your contract.

Can I buy out the lease on my vehicle?

Yes, you can buy out the lease on your vehicle, and you can often buy out your lease early as well. To learn more about why buying out your lease may be a good option for you, read our blog, or get started on a lease buyout with Southland here

Can I refinance my car loan?

Yes, you can refinance your car loan from another lender. Refinancing your loan may lower your monthly payment and interest rate, putting more money in your pocket! Learn more about refinancing your car with Southland here

How can I figure out my monthly payment?

Your monthly car payment will depend on your purchase price, down payment, interest rate and how many months you choose to finance. Use our free auto loan calculator to determine your monthly payment.

A longer term will decrease your monthly payment, but you will pay more in interest over the length of your loan.

Do I have to provide a down payment on a vehicle purchase?

No, you may not need to provide a down payment. However, providing a down payment may increase your chances of being approved for a car loan, and can help to lower the amount of interest you will pay over the length of your loan.

Can I pay off my car loan early?

Yes, at Southland you can pay off your vehicle loan early with no pre-payment penalty. 

Do I have to have car insurance? 

Yes, the State of California does require all vehicles parked or driven in the state to have proper vehicle insurance. More information on insurance requirements can be found on the DMV website

You may be able to save on car insurance by bundling with a family member or with your home or renters insurance.

Does Southland offer car insurance?

We've have partnered with TruStage Auto Insurance to bring you programs that provide discounted rates exclusively for credit union Members, with online services and 24/7 claims support. To find out how much you can save, call 855-483-2149.

Southland also offers affordable optional insurance benefits to protect your investment. These include extended warranties called Mechanical Breakdown Protection coverage (MBP), Guaranteed Asset Protection coverage (GAP) and ConsumerSafe Debt Protection. For a free quote, click here.

Are there any perks for purchasing an electric or hybrid vehicle?

Southland offers a .25% rate discount on qualified clean energy vehicles. For details on the rate discount, click here

What is a vehicle title and who holds it?

A vehicle title shows the proof of ownership of a car. This is different from a vehicle registration or proof of insurance. A title also designates the vehicle as clean, clear, rebuilt or salvage. 

Legally, the vehicle belongs to whoever is listed on the car title as the owner or joint owner, which may include the lienholder if the car is currently financed. 

When you purchase a vehicle with no financing, you should receive the title during the car buying process. If you buy from a car dealer, you'll need to sign documents at the dealership and they usually help you with the car title paperwork. If you take out a loan to purchase the car, there's a lien on the title, and the bank or credit union may hold the title until your loan is paid off. In a private party car sale, the seller will need to transfer ownership to you or whoever is providing your financing.

What should I keep in mind while car shopping?

First and foremost, you need to have an understanding of your budget and how much car you can afford. It's important to do your research on any vehicle, particularly a used vehicle. Read our blog for 8 steps you should follow when shopping for a car. 

Southland has partnered with AutoSMART and Carscouts to make car shopping a lot easier! Use AutoSMART to shop for cars online or take advantage of Carscouts for a full-service shopping experience that includes your new car delivered right to you! To get started with Carscouts, call 877-450-6747.