Is 0% Really Better?

The decision has been made—you need a new car. But this creates another decision if you can’t buy it with cash…how will you finance it?

The dealer offers 0% financing for 60 months or a $2,000 rebate. Both deals sound pretty good, but which one is the best deal for you? Let’s crunch the numbers.

Vehicle cost = $20,000

0% financing for 60 months
Payment = $333 per month

$2,000 rebate
$18,000 loan for 60 months at 2.49%
Payment = $319 per month

As you can see, the rebate gives you an edge of $14 per month on payments, which comes to close to $840 over the life of the loan.

Be aware that specials like 0% financing are often limited to specific models and can come with qualifications that limit who can take advantage of the offers.

Here’s another thing to consider—that 0% financing offered through the dealer means you’ll be involved with such companies as Ford Motor Credit or GM Financial. Customer support there can come from places like Omaha, Nebraska, or Fort Worth, Texas. Not that folks in Nebraska or Texas are bad, but an auto loan from Vantage Credit Union keeps your money right here in St. Louis. And, if you ever need to talk to anyone face-to-face, you know where to find us.