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What does 0% really cost?

Zero percent financing offers might sound great, but are they? Not always. If there’s a manufacturer’s rebate, don’t give it up in lieu of zero percent financing. It may cost you more in the long run. Compare the cost of a $20,000 vehicle with a loan term of 36 months:

        EFCU          Manufacturer 
Interest Rate 4.25% 0%
Manufacturer's Rebate $3,000 none
Amount to Finance $17,000 $20,000
Total Interest Paid in 3 years $1,138 $0
Total Payments $18,138 $20,000
Financing with EFCU saves you...  $1,862
 

And, even if you don’t give up the rebate, it can still cost you. Experts warn that when consumers get good financing - and many believe 0% is the best deal available - they don't negotiate on price. As a result, car payments can be much higher than the budget can bear.

Don't let manufacturer incentives lure you into a trap that leaves you cash-strapped. Call us at 812.424.2621, option 3 to help you sort out your options and figure out the best financing for your car - and your cash flow.

 

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