0% Auto Loans
0% financing is becoming more and more common in the auto industry. It seems like a great deal right? That is not always true. Many times 0% offers are used to “bait and switch” since it can be very hard to qualify for the rate. The dealership is able to get you into their finance department and pressure you into a higher rate. Often a large down payment is also required to qualify for the 0% rate.
Taking the 0% financing in most cases will forfeit the rebate money. The rebates could save you hundreds, even thousands of dollars over the term of the loan. Below is an example of 0% APR from a dealership in comparison to St. Paul Federal Credit Union’s best rate on a new vehicle with the rebate. The rebate information was retrieved from www.cars.com and vehicle MSRP was retrieved from www.chevorlet.com on October 28, 2011.
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Comparison of 48 Month New Auto Loan (2011 HHR)* |
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| St. Paul Federal - 3.99% APR | Dealership - 0% APR | |
| Cost (MSRP) | $18720 | $18720 |
| Rebate (on Oct. 28, 11) | $3500 | $0 |
| Tax | $989 | $1217 |
| Down Payment (10%) | $1800 | $1800 |
| Total Financed | $14409 | $18137 |
| Monthly Payment | $325 | $378 |
| Finance Charges | $1204 | $0 |
| Total Cost** | $17414 | $19937 |
| Amount Saved | $2523 | |
This is just one example of the possible savings when choosing the rebate over dealership financing. Stop in and talk with a Member Service Representative and compare your options. We’ll find out what the best route, whether it is taking the 0% or taking the rebate, and get you in your new car today!
*APR = Annual Percentage Rate. Auto loan comparison uses the 2011 Chevrolet HHR for calculations. Calculations are for example purposes only. Calculations are based off exceptional credit history, your rate may differ.
**Total Cost includes: MSRP less rebate, Tax, Down Payment, and Finance Charges.
