Should you take the 0% financing or opt for the cash back rebate and Credit Union financing?
At first glance, the 0% deal seems like the better deal, right? Maybe not.
Check the fine print.
Most 0% financing offers have some very specific restrictions. The “deal” is generally limited to very high credit scores, as much as 750 and above. There are often term limits, meaning you’ll have to be able to afford a 2- or 3-year payment option. Often larger down payments may be required, pre-payment penalties may exist, and negotiating a better deal could be a problem. Additionally, you may be restricted to qualifying models or “on-site stock,” which limits colors, styles and other options.
Here’s the difference.
For this example, let’s assume you do qualify for the special deal, and it applies to your car and term. The first example calculates 0% financing. The second column shows the rebate option with credit union financing.
Based on the above information, taking the cash rebate and financing at the Credit Union means a savings of nearly $2,000 over the term of the loan.
Every situation is different. Use our Auto purchase: Loan versus 0% dealer financing? calculator to determine which option is right for you.