Don’t choose 0% Financing

Don’t choose 0% Financing

Don’t choose 0% Financing

0% financing is good…right?  Of course, 0% financing is good.  But you have to pass on the rebates to get it.  The real question is, should you pass on the rebates to get 0% financing?  The answer is no.  Your loan balance is key, for several reasons.  The first reason is “what if” your new vehicle that you financed at 0% is totaled next month?  Your insurance company will settle with you for a certain amount. Will that settlement amount pay the balance? It’ll be a lot closer to paying the balance if you would have taken the big rebate.  Make sense?  The second reason is that you’ve got to keep that loan open for the entire term to receive the benefit.  Statistics show that about half of the people that choose 0% financing, for one reason or another, end up getting out of their loan before the full term.  The manufacturer hopes you do take the 0% because their data proves that it’s less costly.  Why do you think manufacturers advertise on TV the 0% and place the rebates in small print?  If you take the rebate upfront you are guaranteeing you’ll receive the entire benefit today.  Remember, loan balance is key.  Also, there is very little payment difference, if any, in a 0% loan from the manufacturer and a low-interest rate with your credit union + rebate.  What do car people working in the industry do?  They always take the rebate and so should you!