0% Financing: Why Credit Union Rates May Be a Better Choice
Shopping for a new vehicle? On the surface, 0% financing may seem like the best deal. And in some cases, this may be true. On the other hand, 0% financing with the dealer is not always the best route. It pays to do the calculations before you decide which deal is best for you. Here are things to consider:
• Not everyone qualifies for low-rate financing. You generally must have near-perfect credit to receive these teaser rates.
• If you qualify for incentives, you must choose between low-rate financing or factory cash-back offers. Choosing SESLOC financing and applying the factory rebate to reduce the total cost of your loan may reduce your payments and save you money in the long run. Use our web site loan calculator to determine the difference between paying full price at 0% and taking the rebate with 5.75%* financing.
• Monthly payments on low-rate loans may be more than you can afford. In many cases, financing deals are short-term; usually 24-36 months.
Rather than opting for a short-term loan with high payments, you’ll find you have more flexibility with a longer-term loan. Because there are no pre-payment penalties at SESLOC, you still have the option of paying off your loan in a shorter period of time and saving interest. However, for months when you need extra cash, such as during the holidays, you have the option of making the lower payment.
Do the Calculations: Rebates will vary and your Credit Union loan rate is based on your earned rate lending score. So plug in the numbers yourself. Many members are amazed to find that the total cost of the car is actually LESS when they use the rebate to reduce the total amount of their Credit Union loan – even when they select a 60-month term.
Carla Swift cswift@sesloc.org
(Date: 2004-07-21 13:06:24)
