Billboards, newspaper ads, bus stops and the radio. You name it, and chances are that it’s there too. The automotive zero percent financing craze is everywhere and consumers like yourself are accepting these offers that fall short of being a good deal. Zero percent sounds enticing, it actually sounds as if you are driving off the lot with no strings attached. When in fact, you are paying anywhere from $1000-$3000 more in financing.

Most zero percent financing deals for go the cash rebate. Rebates can be as high as $5000.00. Mathematically, it is usually more cost conscious to take the rebate and get the financing done elsewhere. Many consumers apply for a zero percent loan and then later learn that only near perfect credit score applicants will be approved.

In the case that a dealer offers zero percent along with a rebate, it would be wise to research the price of the vehicle. The vehicle in question may be over priced to compensate for the 0% and rebate.

$25,000 Auto Loan, 0 % or $3000 Rebate?

Dealer financing with 0% interest

$25,000 ( total financed- no rebate)

0% APR for 36 months= $695/month

Credit Union financing with dealer rebate

$22,000 ( total financed with rebate)

at 4.55 %APR for 36 months = $655/month

Choosing the 0% financing option costs you more than $1300 extra over the life of the loan.

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