When you’re purchasing any type of vehicle you want to find the best deal possible. Many promotional ads offer cash back, while others entice prospective buyers with the promise of zero percent financing. While both these options can help reduce the overall cost of a new vehicle, one choice might be better suited for you and your family. Discover the pros and cons of rebates and 0% financing!
Low-Interest or 0% Financing
When dealerships offer 0% financing, they typically do so through an outside lender. Zero percent financing means that the owner only pays the amount they borrowed, rather than paying the original sum plus added interest. While 0% interest loans appear attractive, they often come with strings attached. To qualify for a zero interest loan, buyers must have an exemplary credit history. Terms of the loan are typically shorter, and it may ONLY be available for selected models. Plus, if there is a manufacturer rebate, the buyer is not able to take advantage of those savings if they choose the 0% financing.
Manufacturer Cash Rebates
A manufacturer cash rebate is exactly how it sounds. If a prospective buyer is interested in a vehicle that is $35,000 and the auto dealer offers them $5,000 cash back, the buyer will only pay $30,000. Taking the manufacturer rebate and financing your auto loan through your local credit union offers the buyer more significant savings in the long run! Another benefit of choosing to finance through your credit union is affordable insurance-related products like GAP Insurance and extended Auto Warranties.
Choosing What’s Best for You
At the end of the day, choosing between 0% financing and cash rebate depends upon your circumstances. If you’re still on the fence, consider using a loan calculator to determine the best solution. You can also visit Your Credit Union, and talk to one of our knowledgeable employees. We’d be happy to sit down with you and discuss our current offers and options!