Consumer complaint received 2019-03-28
Company: NAVY FEDERAL CREDIT UNION
State: GA
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Getting a loan or lease
Sub-issue: Confusing or misleading advertising or marketing

Complaint:
Navy Federal Credit union advertises New or Used Auto Loans as low as 2.99 % on their website : https : //www.navyfederal.org/loans-cards/auto-loans. 

At the bottom of the page, theres a disclaimer section thats linked to the 2.99 % rate that states Credit and collateral subject to approval. Rates subject to change and are based on creditworthiness, so your rate may differ. New Vehicles : Year models XXXX, XXXX and XXXX with 7,499 miles or less. Minimum loan amount is {$30000.00} for terms of 85 to 96 months. Payment example : New auto loan of {$20000.00} for 36 months at 2.99 % APR will have a monthly payment of {$580.00}. Used Vehicles : XXXX and older model years or any model year with over 30,000 miles. Late Model Used  Vehicles : Year models XXXX, XXXX and XXXX with 7,500 to 30,000 miles. 


When calling them this afternoon to refinance my vehicle, I was informed that the lowest rate for a Used Vehicle is 4.99 %, regardless of the term of the loan. I inquired about the 2.99 % rate and was told that the rate was for new cars only. After explaining that any reasonable person would receive the same impression that rates can be 2.99 % for used vehicles, a representative from Navy Federal seemed to agree that the 2.99 % wording could potentially be confusing, especially concerning the use of or and that theyd submit feedback to get this cleared up. This is deceptive. Because NFCU implies 2.99 % is available for new or used cars, they should be honoring this and have an option to get a vehicle financed at 2.99 %. Because they dont actually have this option, action needs to be taken. 

My concern is that Navy Federals rates are confusing and that they will not honor this advertised rate. This concern stems from a call I placed last year when I originally bought my car - during that call, I was told Id be able to refinance my car at a significantly better rate assuming my credit situation had improved. As of today, my credit situation has drastically improved and I should be eligible for a better rate, significantly lower than my current rate of 5.59 %.

Given that Navy Federal has admitted that the lowest for a used vehicle is 4.99 %, Im concerned Navy Federal has likely executed numerous refinancing loans to people who thought 4.99 % was based on their credit - not because of the lowest refinancing rate available. Im also concerned that if I applied today, Navy Federal would not honor the mistake and would attempt to offer 4.99 % or 5.69 % ( based on term ) as the lowest possible rate, especially given they expressed this over the phone.

I have put in an ask for Navy Federal to update their literature if its incorrect, and fairly honor the 2.99 % rate in a refinancing application. 


Its important to note that I was dissuaded from applying today after being told that their website was incorrect and that the rates and marketed materials were not correct for used vehicles.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation