Puzzled by 0% Financing?

You might be surprised by how much these great-sounding 0% financing offers can really cost. Sometimes a credit union auto loan can actually cost less than a 0% loan. As with most transactions, it’s always important to carefully read the fine print that can include the following:

• Car dealers generally require 10% down to complete these offers, and at a shorter loan term. This could double your monthly payment more than the amount you would normally budget (i.e., a $765 monthly payment on an $18,000 two-year loan).

• Most car dealerships will restrict the 0% offer to dealer stock, which means that you may not get the style, options or color you want. Plus, you may end up paying for options you never would have selected, which will cost you more in the end.

• Very few people are actually declared eligible for 0% financing at a car dealership because the dealer can set (and keep secret) their criteria for determining who qualifies.

• Car dealerships generally will not negotiate on the price of cars advertised with 0% financing.

A good option to consider is a dealer rebate: If you apply this to the down payment of the car, your financed amount will be less, and with a loan from the credit union of even 4.25%, you’ll still come out ahead in the end. Don’t hesitate to contact one of our Loan Specialists with any questions. We’ll help you figure out the best financing option for your budget.