Credit union buyers may be in the driver’s seat for great car deals.
Automakers are, again, promoting 0% financing and other special promotions. But are the deals as good as they sound? Before you sign on any dotted line, consider factors beyond the interest rate – such as the total amount financed, the potential rebate, and the monthly payment. You may discover that 0% dealer financing isn’t a good deal at all.
While 0% may be an eye-catching rate, there are hidden conditions and other disclaimers you should be aware of. Low rates from most car dealers usually apply to short-term loans. For example, when a dealer offers 0% financing on two-year loans, you may forfeit the manufacturer’s rebate to obtain the low rate (shorter-term rates are typically not offered with rebates). The rate is low because you end up financing a higher amount, which translates to higher monthly payments. Basically, you could pay a $1,500-$4,000 finance charge for what you thought was a great loan rate.
You should also know that many low rates are only offered on select vehicles; usually slow-selling models, to move them off the lot. Not much help if you happen to like more popular models.
So what is your best deal? The only way to know is to make a fair and informed comparison. Before you make a deal, bring your offer to us. We’ll be happy to do the math and show you a side-by-side comparison that reveals your best option. In the end, you’re usually better off taking the dealer’s rebate offer to use as a down payment on your credit union loan. You’ll almost always get a lower rate here than you can find under the same condition at any bank. That’s just how we work. Learn more about our vehicle loan options.
Get pre-approved before your start shopping. Our online application is short and simple, or come by any of our four branches.
Posted on Tue, December 29, 2015
by Catherine James filed under